2013 interim results announcement · 2014-09-01 · market review 6 business review 7 outlook and...

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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong

Kong Limited take no responsibility for the contents of this announcement, make no

representation as to its accuracy or completeness and expressly disclaim any liability

whatsoever for any loss howsoever arising from or in reliance upon the whole or any part

of the contents of this announcement.

2013 INTERIM RESULTS ANNOUNCEMENT

The Board of Directors (the “Board”) of Aluminum Corporation of China Limited*

(the “Company”) is pleased to announce the unaudited interim results of the Company

and its subsidiaries (together the “Group”) for the six months ended 30 June 2013. This

announcement, containing the full text of the 2013 Interim Report of the Company,

complies with the relevant requirements of the Rules Governing the Listing of Securities

on The Stock Exchange of Hong Kong Limited in relation to information to accompany

preliminary announcements of interim results. This 2013 interim results announcement

of the Company is available for viewing on the websites of Hong Kong Exchanges and

Clearing Limited at www.hkexnews.hk and of the Company at www.chalco.com.cn.

1ALUMINUM CORPORATION OF CHINA LIMITED

2013 INTERIM REPORT

CONTENTS

Corporate Information 2

Market Review 6

Business Review 7

Outlook and Prospects 11

Interim Results 13

Interim Dividend 13

Management’s Discussion and Analysis of Financial Conditions and Results of Operations 14

Discussion of Segment Operations 18

Investment of the Company 25

Directors, Supervisors and Senior Management 26

Employees, Pension Plans and Welfare Fund 26

Particulars of Share Capital Structure, Changes and Shareholders 27

Substantial Shareholders with Shareholding of 5% or more 28

Changes in Share Capital 29

Approval of Changes in Share Capital 29

Total Number of Shareholders at the End of the Reporting Period 29

Shareholdings of the Top Ten Shareholders 30

Interests in Shares Held by Directors, Chief Executive and Supervisors 31

Repurchase, Sale and Redemption of the Company’s Shares 31

Charge and Pledges on Group Assets 31

External Guarantees Provided by the Company 32

Corporate Governance 33

Code of Conduct for Securities Transactions by the Directors,

Supervisors and Relevant Employees 34

Audit Committee 35

Significant Events 36

Independent Review Report 42

Unaudited Interim Condensed Consolidated Financial Statements 44

2

CORPORATE INFORMATION

1. Registered name : 中國鋁業股份有限公司

Abbreviation of Chinese

registered name

: 中國鋁業

English name : ALUMINUM CORPORATION OF CHINA LIMITED

Abbreviation of English

registered name

: CHALCO

2. First registration date : September 10, 2001

Registered address : No. 62 North Xizhimen Street,

Haidian District, Beijing, the PRC

(Postal Code: 100082)

Place of business : No. 62 North Xizhimen Street,



Principal place of business

in Hong Kong

: 6/F, Nexxus Building,

41 Connaught Road,

Central, Hong Kong

Internet website of the Company : http://www.chalco.com.cn

E-mail of the Company : [email protected]

3. Legal representative : Xiong Weiping

Company (Board) Secretary : Xu Bo

Telephone : (8610)8229 8322

Fax : (8610)8229 8158

E-mail : [email protected]

Address : No. 62 North Xizhimen Street,




2013 INTERIM REPORT

Representative of the Company’s

securities affairs

: Yang Ruijun

Telephone : (8610)8229 8322

Fax : (8610)8229 8158

E-mail : [email protected]

Address : No. 62 North Xizhimen Street,



Department for corporate

information and inquiry

: Office to the Board

Telephone for corporate

information and inquiry

: (8610)8229 8322/8229 8157

4. Share registrar and transfer office

H shares : Hong Kong Registrars Limited

17M Floor, Hopewell Centre,

183 Queen’s Road East, Wanchai, Hong Kong

A shares : China Securities Depository and

Clearing Company Limited,

Shanghai Branch

3/F, China Insurance Building,

No. 166, Lujiazui Road (East),

Shanghai, the PRC

American Depositary Receipt : The Bank of New York Corporate Trust Office

101 Barclay Street, New York,

NY 10286 USA

4

5. Places of listing : The Stock Exchange of Hong Kong Limited

New York Stock Exchange

Shanghai Stock Exchange

Stock name : CHALCO

Stock code : 2600 (HK)

ACH (US)

601600 (PRC)

6. Principal bankers : Industrial and Commercial Bank of China

China Construction Bank

7. Independent auditors : Ernst & Young

Certified Public Accountants

22/F, CITIC Tower,

1 Tim Mei Avenue,

Central, Hong Kong

Ernst & Young Hua Ming LLP

16/F, Ernst & Young Tower, Oriental Plaza,

1 East Chang’an Avenue, Dongcheng District,

Beijing, the PRC



2013 INTERIM REPORT

8. Legal advisers : as to Hong Kong law:

Baker & McKenzie

23/F, One Pacific Place,

88 Queensway,

Hong Kong

as to United States law:

Baker & McKenzie

23/F, One Pacific Place,

88 Queensway,

Hong Kong

as to the PRC law:

Jincheng Tongda & Neal

10/F, China World Trade Tower

Jianguomenwai Avenue, Chaoyang District,

Beijing, the PRC

6

The board of directors (the “Board”) of Aluminum Corporation of China Limited* (the “Company”)

announces the unaudited interim results of the Company and its subsidiaries (together the “Group”) for

the six months ended June 30, 2013. On behalf of the Board and all of its employees, the Board would

like to express its gratitude to all shareholders for their attention and support to the Company.

MARKET REVIEW

ALUMINA MARKET

From January to June 2013, the global capacity of alumina continued to increase. The increase in China’s

alumina capacity exceeded that of the international market. According to statistics, the global capacity

utilization rate of alumina was approximately 77.69% as at the end of June while that of China was

approximately 84.05%. In the first half of the year, the global output and consumption of alumina

were approximately 49.14 million tonnes and 48 million tonnes respectively, representing a year-on-

year increase of 2.82% and 6.93%, respectively. China’s output and consumption of alumina were

approximately 21.38 million tonnes and 23.00 million tonnes respectively, representing a year-on-year

increase of 12.17% and 21.56%, respectively. Imported alumina was approximately 1.65 million tonnes,

representing a year-on-year decrease of 33.20%.

In the first half of the year, the global alumina market witnessed an initial rise followed by a fall. The FOB

price of spot alumina of Australia hit a record high at USD347 per tonne and a record low at USD325

per tonne, with an average price of USD333 per tonne, representing a year-on-year increase of 4.89%.

The domestic market continued to experience an unqualified downward trend, with a record high and

a record low of domestic price of spot alumina at RMB2,578 per tonne and RMB2,472 per tonne,

respectively, with an average price of RMB2,536 per tonne, representing a year-on-year decrease of 3.47%.

PRIMARY ALUMINUM MARKET

From January to June 2013, the global capacity of primary aluminum continued to increase. As at

the end of June, the global capacity utilization rate of primary aluminum was approximately 85.67%,

while that of China was approximately 89.29%. In the first half of the year, the global output and

consumption of primary aluminum were approximately 24.50 million tonnes and 24.47 million tonnes,

respectively, representing a year-on-year increase of 6.24% and 5.93%, respectively. China’s output

and consumption of primary aluminum were 10.58 million tonnes and 10.60 million tonnes respectively,

representing a year-on-year increase of 11.49% and 10.42%, respectively.


2013 INTERIM REPORT

During the first half of 2013, there was a slowdown in the growth of demand from aluminum end-

customers and the global primary aluminum market saw excess supply. The problem of excess market

supply became more prominent in China. In the first half of the year, the price of three-month aluminum

futures at London Metal Exchange (LME) reached a record high at USD2,160 and a record low at

USD1,764 per tonne, with an average price of USD1,955 per tonne, representing a year-on-year decrease

of 7.61%. The price of three-month aluminum futures at Shanghai Futures Exchange (SHFE) reached a

record high at RMB15,350 per tonne and a record low at RMB14,240 per tonne, with an average price

of RMB14,885 per tonne, representing a year-on-year decrease of 7.62%.

ALUMINUM FABRICATION MARKET

In the first half of the year, the growth in the industry demand from aluminum product end-users

slowed down in line with a slow-down in the growth of the national economy. As a result, the growth

in the demand of aluminum fabrication slowed down. Meanwhile, the long fall in the prices of LME and

SHFE resulted in declining exports of aluminum fabrication. The scale and capacity of domestic aluminum

fabrication enterprises continued to expand and the standard of installed capacity continued to improve,

resulting in more and more intensified competitions in the aluminum fabrication market.

BUSINESS REVIEW

During the first half of 2013, the production and operation of the Company as well as the capacity

of production remained steady. The output of alumina amounted to 6.08 million tonnes, representing

a year-on-year increase of 1.84%; the output of alumina chemicals amounted to 0.76 million tonnes,

representing a year-on-year increase of 20.63%; the output of primary aluminum products amounted to

2.03 million tonnes, representing a year-on-year decrease of 0.49%; the output of coal amounted to 2.42

million tonnes; and power generation volume (excluding self-supply power plants) amounted to 4.041

billion kWh.

8

In the first half of the year, the world economy lacked momentum in recovery. The national economy was

under structural adjustment and transformation of the development model. The price of bulk commodities

in the globe fluctuated and kept declining due to factors such as the slowing down of economic growth.

The prices of the principal products of the Company kept declining. Confronted by the extremely hostile

market scenario, the Company adopted a series of proactive and effective countermeasures:

1. The Company furthered its efforts in restructuring and strategic transformation. In the first half

of 2013, the Company adjusted its development strategies after analyzing the elements of the

overall structural challenges of the aluminum industry and its development needs diligently. It

aspired to strengthen the industry through vigorous acquisitions and development of high-quality

bauxite resources, and leveraged such advantages over resources to develop the core business of

alumina. It optimized and developed the aluminum business which provided the Company with

integrated advantages over coal-electricity-aluminum production. In the first half of the year, the

Company completed the transfer of the aluminum fabrication assets and the assets of the alumina

production line of Guizhou Branch, which improved its structures of assets and liabilities effectively

and reduced the debt to asset ratio accordingly.

2. The Company further promoted the transformation of operations and upgraded its management.

In the first half of 2013, transformation of operations of the Company had been carried out

which covered preliminarily in 25 entities and 14 professional areas. The Company emphasized the

transformation from “being professional” to “being systematic”, from “being micro” to “macro”.

The target of the upgrading of management altered from major entities to auxiliary entities, from

branches to workshops and teams. The Company prioritized operational transformation and set its

quantitative aim of controlling costs and increasing profits according to its production operation,

financial management, sales management, procurement management etc. The percentage of

excellent class alumina increased by 4.55 percentage points as compared with the corresponding

period of the preceding year. The consolidated energy consumption decreased by 7.92% as

compared with the corresponding period of the preceding year. The rate of completion of

aluminum ingots AL99.70 grew by 0.11 percentage point as compared with the corresponding

period of the preceding year. The consumption of alternating current in aluminum ingot

production decreased by 109kWh/t as compared to the corresponding period of the preceding

year. The consolidated rate of qualification of anode carbon block increased by 0.12 percentage

point as compared with the corresponding period of the preceding year. The maintenance

expenses of equipment decreased by 7.80% as compared with the corresponding period of the

preceding year. The Company strengthened its mine facilities and enhanced its management.

It also enhanced the proportion of its self-developed mines, the rate of the integrated use of

associated resources and streamlined the settlement of the ore cost. Meanwhile, it maintained the

supply of its imported ore proactively and made efforts to expand the channels of ore supply in

the places other than Indonesia.


2013 INTERIM REPORT

3. The Company enhanced self-innovation and accelerated achievement transformation. In the first

half of 2013, the Company revised its technological development plan and identified its aim of

technological development by consolidating its current business conditions and development

strategy. The Company focused on the introduction and implementation of major technological

projects such as the new series process of production, the consolidated technology of high sulphur

bauxite production of alumina, the consolidated technology of safe and efficient bauxite mining

under complicated conditions, the technology of consolidated utilization of high-iron-content Bayer

red mud and co-products of iron and aluminum (高鐵拜耳法赤泥及鐵鋁共生礦綜合利用技術) and

the technological research and development of electrolytic cells of ultra-high capacity. It continued to

transform and apply mature technologies, such as the highly efficient Bayer process technology, the

“201” technology and the new cathode steel bar technologies.

4. The Company enhanced its marketing and improved its capacity of cost reduction. In the first half

of 2013, facing a severe market trend, the Company improved its study and analysis of the market

to enhance its knowledge of the market. It explored many profit-generating models from various

pricing mechanisms. It maintained a reasonable level of stock and increased its benefits by leveraging

the fluctuations of the domestic and international spots and futures markets. It also launched its

futures and options businesses and developed hedge and risk hedging ability of futures. Leveraging

futures as hedging tools, it kept itself unscathed by the unfavorable impacts of declining market

prices. The realised price of alumina was higher than the average domestic spot price by RMB63 per

tonne, while that of realised price of aluminum products marked higher than the price of Shanghai

Futures Exchange by RMB84 per tonne. The Company purchased bulk materials in a centralized

manner by centralizing the negotiation and signing contracts separately. The cost of the procurement

was thus reduced and the supply was secured. The Company introduced lean procurement, set up

the “Evaluation Methods of the Procurement System” (採購體系評價辦法), and established a cross-

level and cross-department tracking and supervisory system and a security mechanism.

5. The Company secured funding and strictly controlled finance costs. It kept diversifying its financing

activities into various kinds and various channels and obtained sufficient banking facilities and debt

financing instruments registered at NAFMII (交易商協會). As at the end of June, the unutilized

banking facilities and debt financing instruments of the Company amounted to RMB92.5 billion

and RMB20.0 billion respectively. The Company strengthened the management of current assets

and current liabilities to speed up the recovery of the receivables and raise the efficiency of capital

utilization. The Company implemented numerous measures at the same time, which ensured a

net operating cash inflows of RMB1.662 billion, representing a year-on-year increase of RMB3.477

billion. As at the end of June, the weighted average interest rate of the interest-bearing loans

fell by 0.11 percentage point as compared to the beginning of this year. The annual capital

expenditure budget of 2013 was significantly reduced by 45% as compared to the actual amount

during the same period of 2012.

10

6. The Company launched the reform of “market-orientation and open manner” and stimulated

impetus within the enterprise. In the first half of 2013, the Company completed the recruitments

of general managers for five enterprises, such as Shanxi Huaze, implemented an accountability

system on the management team in accomplishing business objective for risk premium, the

clarification of 3-year operational objectives, the empowerment of the general managers in

personnel distribution, work distribution, appraisal and allocation, as well as the comprehensive

organization of production and operations according to the principles of market-orientation,

legal and regulatory compliance and safety and stability. A market-based personnel selection

and designation system and a target-based responsibility management system were formed

preliminarily. The market orientation reform proved to be successful at the primary stage, with

much stronger impetus in operation and management and improving corporate performance. In

August 2013, the Company completed the market-orientation reforms of two enterprises, namely

Lanzhou Branch and Baotou Aluminum Co., Ltd.

7. The Company strived to safety production and environment protection. As the Company expanded

its scale, there was a further increase in energy and resource consumption. In the meantime,

the quality of bauxite and coal declined. All the above imposed greater and greater pressure to

safety production and environment protection. In the first half of 2013, the Company continued

to enhance the establishment of an accountability system of safety, environmental protection and

health. It continued to improve and enhance the level of the standardization of safe production.

It strengthened the consolidated penalty of violations of regulations and the elimination of

potential risks. It also introduced a consolidated governance of carbon enterprises and the safety

management of mines. It strengthened the education and trainings of safety and optimized plans

for onsite management of entity enterprises.


2013 INTERIM REPORT

OUTLOOK AND PROSPECTS

In the second half of 2013, the world economy saw a lacklustre recovery with uncertainties abound.

China’s economy, albeit being steady as a whole, enters a stage of structural adjustment as it grapples

with overcapacity and other contradictions. There was no alleviation for the oversupply of the Company’s

principal products and the market is likely to turn more gloomy. The Company will continue to introduce

structural adjustment, deepen the reform of “market-orientation and open manner”, and push forward

the transformation of operations and improvement of its management. Furthermore, it will strengthen

its capital management, maintain safety production and endeavor to reduce losses significantly for a

turnaround, which is the business target for the year. The principal tasks are as follows:

1. The Company will further make structural adjustment according to its strategy. The Company

will further research on plans and measures of assets restructuring according to its long-term

development and short-term benefits. The Company will suspend production of, merge and

transfer those production lines or enterprises where breakeven could not be achieved. The energy

segment, subject to safety, will improve the mining technology and the quality and quantity of coal

and aspire to strike a balance between production and sales. The Company will reduce costs by

means of technology. It will accelerate the industrial implementation of new technologies, such as

the dissolution of sodium carbon clinker and the application of highly conductive electrolyte. The

Company will strive to develop the entire flotation of desulphurization technology. The Company

will continue to proceed with the Simandou Project, accelerate the exploration process of the

bauxite mining project of the joint venture in Laos and meet the target of the increase in bauxite

production of the joint venture in Indonesia. The Company will accelerate the implementation of

the preliminary work of the alumina project in West Kalimantan, Indonesia. It will speed up the

preparation for the transfer of production capacity in Guizhou Branch and the integrated coal-

electricity-aluminum project.

2. The Company will expedite the technological innovation and reduce the cost through technology.

It will strengthen the application of key technological projects and make breakthroughs in

significant key technologies. It will continue to speed up the transformation, promotion and

application of mature technologies, such as the highly efficient Bayer technology, the “201”

technology and the new cathode steel bar technologies.

12

3. The Company will further introduce the “market orientation and open manner” reform. Such

reform triggered the enterprise’s momentum and vitality. The Company will launch the reform of

marketization in several key enterprises on the basis of summarizing the experience drawn from

the enterprise reform seriously. The Company will issue the “Human Resources Plan for 2013-2015

of Aluminum Corporation of China Limited*” (《中國鋁業股份有限公司2013-2015年人力資源規

劃》) which emphasizes the training and the enrollment of talents specialized in mining, energy

and overseas development.

4. The Company will continue to transform its operations and refine its management

comprehensively. It will strengthen its operational transformation and daily management, and

further promote better management across the basic managing units in the enterprise with a focus

on the management and examination at the requests of fundamental levels. It will move forward

to strengthen the capability of CBS core team and speed up the development of a standardized

CBS module. It will further improve the management in mines and reinforce production safety and

construction of the mines to improve the self-supply of the ore.

5. The Company will strength its market researches to increase sales profits. The Company intends to

strengthen its market research so as to improve its market foresight. It will reinforce its operational

strategies and methods to capture favorable commercial opportunities. It will strengthen its

development in the international market to diversify the sources of its business income and profits.

It will continue to boost marketing efforts in the coking coal market and strive to commence

coking coal fabrication, trading and export so as to increase the integrated benefits brought by

coking coal trading. In addition, it will step up efforts in achieving a balanced product delivery

and allocate its resources reasonably to reduce the cost of transportation. The Company will make

greater efforts in consolidating negotiations and separating the execution of contracts for bulk

materials, further increase the proportion of centralized coal procurement to reduce its logistics

cost and formulate and optimize its logistic system development plans.

6. The Company will enhance capital management and safeguard its funding. It will keep on

adhering to the concept of ‘’cash is king’’. With this in mind, it will prepare various financing

plans to ensure financing via multi-channels at a low cost. It will proceed with the issue of

perpetual loans to meet its financing target. It will try to secure a relatively significant increase in

the net cash inflow from operating activities year on year, maintain its asset-to-liability ratio within

a reasonable target and effectively control the financial expenses.


2013 INTERIM REPORT

7. The Company will strengthen production safety and intrinsic safety. It will examine and eliminate

potential risks and loopholes according to the requirement of “punishing management for safety

risks and ensuring safety with an iron fist” (從嚴抓管理，鐵腕治安全). It will strengthen its safety

responsibility mechanism to prevent accidents and implement the “seven preventions” (七防)

during operations in summer, namely “prevention of flood, prevention of collapse, prevention of

lightning, prevention of heatstroke, prevention of falls from height, prevention of lifting injuries

and prevention of electrical injuries” (防洪、防坍塌（倒塌）、防雷電、防暑降溫、防高空墜落、防

起重傷害、防電氣傷害). The Company will integrate the quality control system, the environmental

management system and the vocational health and safety management system to verify and

supervise the examinations. It will raise the awareness of the employees and ensure production

safety.

In the second half of 2013, the Company will strive to reduce its losses significantly to meet the business

target set for the year, which is to turn losses into profit in order to bring valuable returns to the

shareholders of the Company.

INTERIM RESULTS

The operating revenue derived from the Group’s continuing operations for the six months ended June

30, 2013 amounted to RMB71,113 million, representing an increase of 6.51% compared with the

corresponding period of the preceding year. The revenue of the Group (including that from continuing

operations and discontinued operation) was RMB76,641 million, representing an increase of 6.89%

compared with the corresponding period of the preceding year. The loss attributable to equity holders

of the Company amounted to RMB596 million. Loss per share attributable to equity holders of the

Company was RMB0.04.

INTERIM DIVIDEND

The Company will not distribute interim dividend for the six months ended June 30, 2013.

14

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

The following discussion should be read together with the financial information and its notes included in

this interim report and other chapters.

BUSINESS SEGMENTS

The Group principally engages in alumina refining, primary aluminum smelting, aluminum fabrication

products production and trading of the related products. On January 23, 2013, the Company acquired

Chalco Ningxia Energy Group Co., Ltd.* (hereby referred to as “Ningxia Energy”), therefore, the

Group newly engaged in energy segment in 2013. On June 27, 2013, the Company disposed of its

aluminum fabrication segment, therefore in the first half of 2013, aluminum fabrication segment was

still included, but will not be included in the Group’s results in the second half of 2013. In accordance

with International Financial Reporting Standards, the aluminum fabrication segment was classified as

discontinued operation and the operating results of aluminum fabrication segment has been presented

as discontinued operation in the interim condensed consolidated statement of comprehensive income for

the period ended June 30, 2013. The comparative figures for the six months ended June 30, 2012 for

the interim condensed consolidated statement of comprehensive income and related notes were restated

to reflect the reclassification between continuing operations and discontinued operation accordingly.

Therefore, the comparative figures used in the section of “Management’s Discussion and Analysis of

Financial Conditions and Results of Operations” were restated to reflect the above restatement. Details

on discontinued operation are disclosed in Note 6 to the interim condensed consolidated financial

statements. Business segments comprise:

Alumina segment, which consists of mining and purchasing bauxite and other raw materials, refining

bauxite into alumina, and selling alumina both internally to the Group’s aluminum plants and externally

to customers outside the Group. This segment also includes the production and sales of alumina

chemicals and metal gallium.

Primary aluminum segment, which consists of procuring alumina, other raw materials, supplemental

materials and electricity power, smelting alumina to produce primary aluminum and selling them to the

Group’s internal aluminum fabrication plants and external customers outside the Group. This segment

also includes the production and sales of carbon products, aluminum alloy products, and other aluminum

products.

Aluminum fabrication segment, which consists of procuring primary aluminum, other raw materials,

supplemental materials and electricity power, and further processing primary aluminum for the

production and sales of seven main aluminum fabricated products, including casts, planks, screens,

extrusions, forges, powder and die castings.


2013 INTERIM REPORT

Trading segment, which consists of the trading of raw materials, fuels and supplemental materials such

as alumina, primary aluminum, aluminum fabrication products, other non-ferrous metal products and

coal to the internal manufacture plants and external customers in the PRC.

Energy segment, which is mainly engaged in the research, development, production and operation of

energy products. The major business consists of coal, electricity generation from coal, wind power and

photovoltaic power, new energy equipment production, construction and operation of the integrated

solution of coal power supply with its aluminum business, etc.

Corporate and other operating segments, which include corporate and other aluminum-related corporate

research and development activities.

RESULTS OF OPERATIONS

The Group’s net loss attributable to the shareholders of the parent for the first half of 2013 was RMB596

million, among which losses from continuing operations amounted to RMB832 million, while profits from

discontinued operation amounted to RMB236 million (please refer to note 6 to the financial statements

for details of discontinued operation). The Group’s net loss attributable to the shareholders of the parent

for current period decreased significantly by 81.68% from RMB3,253 million of the corresponding period

of the preceding year. This was mainly attributable to the Group’s strict control of cost and expenses

in every aspect, and efforts in enhancement of the gross profit of its major businesses. Besides, the

Group recognised gain on the acquisition of Ningxia Energy and its operating profit. Moreover, the

Group recognised gain on deemed disposal of the equity interest in Jiaozuo Wanfang and gain from the

disposal of aluminium fabrication segment and alumina production line of Guizhou Branch.

REVENUE

The Group’s revenue generated from continuing operations for the first half of 2013 was RMB71,113

million, representing an increase of RMB4,344 million or 6.51% from RMB66,769 million of the

corresponding period of the preceding year. This was mainly attributable to the increase in external

trading volume of the Group, and the newly added revenue of coal and electricity contributed by the

newly acquired subsidiary of Ningxia Energy.

16

COST OF SALES

Cost of sales of the Group from continuing operations was RMB69,768 million for the first half of 2013,

representing an increase of RMB3,332 million or 5.02% from RMB66,436 million of the corresponding

period of the preceding year, which was 1.49 percentage points lower than the growth in revenue from

continuing operations. This was mainly attributable to the increase in the external trading volume of the

Group, and the newly added sales of coal and electricity contributed by the newly acquired subsidiary of

Ningxia Energy. However, as the Group strictly controlled the cost and expenses in various aspects, the

production cost of the principal products fell to some extent as compared with the corresponding period

of the preceding year.

In the first half of 2013, the production cost of alumina, the major product of the Group, fell by 8.52%

as compared with the corresponding period of the preceding year. In particular, through operational

transformation and strengthening of fundamental management, the fall in consumption of raw materials

and fuel drove the cost to decrease by 6.01%, the drop of the price of raw materials and fuel drove the

cost to decrease by 3.87%, while the rise in the price of bauxite drove the cost up by 1.20%.

In the first half of 2013, the production cost of primary aluminium, the major product of the Group,

fell by 6.64% as compared with the corresponding period of the preceding year. In particular, through

operational transformation and strengthening of fundamental management, the drop of price in raw

materials, fuel and power drove a decrease of 6.08% in cost, and the decrease in the consumption of

raw materials, fuel and power drove a decrease of 0.44% in cost, and the change in producing cost

drove a decrease of 0.12% in the cost.

SELLING AND DISTRIBUTION EXPENSES

The Group’s selling and distribution expenses from continuing operations for the first half of 2013

were RMB847 million, representing a decrease of RMB52 million or 5.78% from RMB899 million of the

corresponding period of the preceding year. This was mainly attributable to the decrease in the expenses

of transportation and loading due to the Group’s strict control of the cost in various aspects.


2013 INTERIM REPORT

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses from continuing operations for the first half of 2013 of the Group

were RMB1,257 million, representing an increase of RMB44 million or 3.63% from RMB1,213 million

of the corresponding period of the preceding year. Excluding the general and administrative expenses

of the newly acquired subsidiary of Ningxia Energy, the general and administrative expenses decreased

by 8.33% as compared to the general and administrative expenses of the corresponding period of the

preceding year, which was mainly attributable to the Group’s strict control of the cost and expenses in

various aspects.

OTHER GAINS, NET

In the first half of 2013, other net gain of the Group from continuing operations was RMB1,741 million,

representing an increase of RMB1,919 million as compared to other net loss of RMB178 million of the

corresponding period of the preceding year. This was mainly attributable to the gain on acquisition of

Ningxia Energy and gain from loss of control of Jiaozuo Wanfang through deemed disposal.

Given the major factors described as above, the Group’s operating profit from continuing operations

was RMB1,426 million for the first half of 2013, representing an increase of RMB3,183 million from the

operating loss of RMB1,757 million of the corresponding period of the preceding year.

FINANCE COSTS, NET

The Group’s net finance costs from continuing operations for the first half of 2013 were RMB2,606

million, representing an increase of RMB566 million or 27.75% from RMB2,040 million of the

corresponding period of the preceding year. This was mainly attributable to the significant increase in

scale of interest-bearing borrowings contributed by the consolidation of Ningxia Energy. Excluding the

finance costs of the newly acquired subsidiary of Ningxia Energy, the finance costs increased by 7.22%,

among which the increase in the average interest-bearing borrowings caused an increase of 20.33% in

the net finance costs as compared with the corresponding period of the preceding year, but the increase

was offset by the fall in the weighted average interest rate and other factors by 13.11%.

18

SHARE OF PROFITS OF JOINT VENTURES AND ASSOCIATES

For the first half of 2013, the Group’s share of profits of joint ventures and associates from continuing

operations amounted to RMB292 million, representing an increase of RMB136 million from RMB156

million of the corresponding period of the preceding year, primarily due to newly added share of profits

of joint ventures and associates as a result of the consolidation of Ningxia Energy.

INCOME TAX

The Group’s income tax expense from continuing operations for the first half of 2013 was negative

RMB34 million, representing an increase of RMB691 million from negative RMB725 million of the

corresponding period of the preceding year. This was mainly attributable to the fact that the Group

recognised deferred tax assets related to the tax loss generated in the first half of 2012, while most of

the tax losses of the Group for the first half of 2013 have not been recognised as deferred tax assets.

DISCUSSION OF SEGMENT OPERATIONS

ALUMINA SEGMENT

Revenue

The Group’s revenue from the alumina segment for the first half of 2013 was RMB15,811 million,

representing a decrease of RMB84 million or 0.53% from RMB15,895 million of the corresponding

period of the preceding year.

The revenue from internal sales of the alumina segment for the first half of 2013 was RMB14,658

million, representing an increase of RMB107 million or 0.74% from RMB14,551 million of the

corresponding period of the preceding year.

The revenue from external sales of the alumina segment for the first half of 2013 was RMB1,153 million,

representing a decrease of RMB192 million or 14.28% from RMB1,345 million of the corresponding


The price for external sales of self-produced alumina for the first half of 2013 was RMB2,204 per

tonne (excluding VAT, same hereafter), representing a decrease of RMB167 per tonne or 7.04% from

RMB2,371 per tonne of the corresponding period of the preceding year.


2013 INTERIM REPORT

Segment Results

The Group’s loss in the alumina segment for the first half of 2013 was RMB577 million, representing a

decrease of RMB983 million or 63.01% from the loss of RMB1,560 million of the corresponding period

of the preceding year.

PRIMARY ALUMINUM SEGMENT

Revenue

The Group’s revenue from the primary aluminum segment for the first half of 2013 was RMB26,046

million, representing a decrease of RMB2,213 million or 7.83% from RMB28,259 million of the


The revenue from internal sales of the primary aluminum segment for the first half of 2013 was

RMB10,397 million, representing a decrease of RMB2,337 million or 18.35% from RMB12,734 million of

the corresponding period of the preceding year.

The revenue from external sales of the primary aluminum segment for the first half of 2013 was

RMB15,648 million, representing an increase of RMB122 million or 0.79% from RMB15,526 million of

the corresponding period of the preceding year.

The average price for external sales of primary aluminum products for the first half of 2013 was

RMB12,648 per tonne (excluding VAT, same hereafter), representing a decrease of RMB1,049 per tonne

or 7.66% from RMB13,697 per tonne of the corresponding period of the preceding year.

Segment Results

The Group’s loss in the primary aluminum segment for the first half of 2013 was RMB986 million,

representing a decrease of RMB230 million or 18.91% from the loss of RMB1,216 million of the


20

TRADING SEGMENT

Revenue

The Group’s revenue from the trading segment for the first half of 2013 was RMB58,054 million,

representing an increase of RMB1,162 million or 2.04% from RMB56,892 million of the corresponding


The revenue from internal sales of the trading segment was RMB5,775 million for the first half of 2013,

representing a decrease of RMB1,154 million or 16.65% from RMB6,929 million of the corresponding


The revenue from external sales of the trading segment was RMB52,278 million for the first half

of 2013, representing an increase of RMB2,316 million or 4.64% from RMB49,962 million of the

corresponding period of the preceding year, among which, the revenue from the external sales of self-

produced products was RMB17,196 million, whereas the revenue from the external sales of products

from external suppliers was RMB35,082 million.

Segment Results

The profit in the trading segment of the Group was RMB286 million for the first half of 2013,

representing an increase of RMB12 million or 4.38% from the profit of RMB274 million of the


ENERGY SEGMENT

Revenue

The Group’s revenue from the energy segment for the first half of 2013 was RMB1,967 million, which

was mainly attributable to the revenue from sales of coal and electricity by the newly acquired subsidiary

of Ningxia Energy.


2013 INTERIM REPORT

Segment Results

The profit in the energy segment of the Group was RMB159 million for the first half of 2013, which

was mainly attributable to the operating profit contributed by the newly acquired subsidiary of Ningxia

Energy.

CORPORATE AND OTHER OPERATING SEGMENTS

Revenue

The Group’s revenue from the corporate and other operating segments for the first half of 2013 was

RMB306 million, representing a decrease of RMB16 million or 4.97% from RMB322 million of the


Segment Results

The Group’s segment profit from the corporate and other operating segments for the first half of 2013

was RMB426 million, representing an increase of RMB1,529 million from the loss of RMB1,103 million of

the corresponding period of the preceding year, mainly attributable to the gain on acquisition of Ningxia

Energy, gain from deemed disposal of Jiaozuo Wanfang and gain from the disposal of the equity interest

and assets of aluminum fabrication segment.

STRUCTURE OF ASSETS AND LIABILITIES

Current Assets and Liabilities

As of June 30, 2013, the Group’s current assets amounted to RMB63,287 million, representing an

increase of RMB14,271 million from RMB49,016 million as of the beginning of the year, mainly

attributable to the receivable from the disposal of the equity interest and assets of aluminum fabrication

segment and the alumina production line of Guizhou Branch.

As of June 30, 2013, the Group’s cash and cash equivalents and restricted cash and time deposits

amounted to RMB10,951 million, representing an increase of RMB759 million from RMB10,192 million

as of the beginning of the year.

22

As of June 30, 2013, the Group’s net balance of inventories amounted to RMB25,235 million,

representing a decrease of RMB361 million from RMB25,596 million as of the beginning of the year,

primarily due to the acceleration in the turnover of inventories.

As of June 30, 2013, the Group’s current liabilities amounted to RMB93,669 million, representing an

increase of RMB9,816 million from RMB83,853 million as of the beginning of the year, primarily due to

the increase in short-term borrowings and payables for replenishment of working capital resulting from

the Group’s efforts in optimization of its debt portfolio.

As of June 30, 2013, the current ratio of the Group was 0.68, representing an increase of 0.10

percentage point from 0.58 as of the beginning of the year, and the quick ratio was 0.41, representing

an increase of 0.13 percentage point from 0.28 as of the beginning of the year.

Non-current Liabilities

As of June 30, 2013, the Group’s non-current liabilities amounted to RMB54,496 million, representing

an increase of RMB17,104 million from RMB37,392 million as of the beginning of the year, primarily due

to the newly added non-current liabilities such as long-term loans from the newly acquired subsidiary of

Ningxia Energy.

As of June 30, 2013, the debt to asset ratio of the Group was 73.17%, representing an increase of 3.89

percentage points from 69.28% as of the beginning of the year.

MEASUREMENT OF FAIR VALUE

The Group strictly established the procedures for recognition, measurement and disclosure of fair value

in accordance with the requirements on fair value under the relevant accounting standards, and took

responsibility for the truthfulness of the measurement and disclosure of fair value. As of June 30, 2013,

except that its financial assets and liabilities at fair value through profit or loss (including derivative

instruments) are accounted at fair value, others are stated at historical cost.


2013 INTERIM REPORT

As of June 30, 2013, the foreign currency forward contracts held by the Group, which were accounted

for as financial asset at fair value through profit or loss, decreased by RMB3 million as compared with

the balance as of the beginning of the year, of which the change was recognized as loss in fair value

changes. The amount of the commodity futures contracts decreased by RMB5 million as compared with

the balance as of the beginning of the year, of which the change was recognized as loss in fair value

changes. The amount of the Group’s commodity futures contracts accounted for as financial liability

at fair value through profit or loss were RMB1 million, representing a decrease of RMB12 million as

compared with the balances as of the beginning of the year. The decrease was RMB4 million after

excluding the decrease in aluminum fabrication segment of RMB8 million, and was recognized as gains in

the fair value changes. The newly introduced option contracts of this period amounted to approximately

RMB12 million.

PROVISION FOR INVENTORY IMPAIRMENT

On June 30, 2013, the Group assessed the net realizable value of its inventories. For the inventory

relevant to aluminum products, the assessment was made with comprehensive consideration of the

coordination scheme of the production and sales between alumina enterprises and aluminum enterprises

within the Group, and the factors including the financial budget, turnover period of inventory, the

purpose of the Company to hold the inventory and the influence of events subsequent to the balance

sheet date, the assessment was made on the net realizable value of its inventories based on the

estimated selling price of the finished goods available for sale. For the inventory held by the energy

segment, after comprehensively considering the cooperative scheme on production and sale along the

chain of the photovoltaic industry, the Group unanimously calculated with the market price for the most

immediate period. The net realizable value of the inventory which was not sold after the period was

evaluated at the market price of the finished goods less the cost and expenses required for the whole

process of a product to be ready for sale.

The provisions for inventory impairment for inventories held as of June 30, 2013 amounted to RMB1,203

million, representing a decrease of RMB204 million as compared with the provisions for impairment of

RMB1,407 million at the beginning of the year. The decrease was caused by increase in net provisions

and reversal of RMB195 million, the addition of RMB180 million from the consolidation of Ningxia

Energy, the written-off for the period of RMB450 million, and the decrease of RMB129 million from the

disposal of Jiaozuo Wanfang and disposal of the aluminum fabrication segment.

The Company has always adopted the same approach to determine the net realizable value of the inventories

and the provisions of inventories impairment on a consistent basis for the relevant accounting policy.

24

CAPITAL EXPENDITURES, CAPITAL COMMITMENTS AND INVESTMENT

UNDERTAKINGS

For the six months ended June 30, 2013, the Group’s accumulated project investment expenditures

(exclude equity-interest investment) amounted to RMB4,544 million, which mainly consisted of

investments in energy saving and consumption reduction, environmental protection, resources acquisition

and technological research and development.

As of June 30, 2013, the Group’s capital commitment of fixed asset investment amounted to RMB52,859

million, of which those contracted but not provided amounted to RMB6,976 million and those authorized

but not contracted amounted to RMB45,883 million.

As of June 30, 2013, the Group’s external investment undertakings amounted to RMB211 million,

comprised mainly of the capital contributions of RMB131 million, RMB50 million and RMB30 million to

Chalco Liupanshui Hengtaihe Mining Co., Ltd. (中鋁六盤水恒泰合礦業有限公司), Huozhou Coal Group

Xingshengyuan Coal Co., Ltd. (霍州煤電集團興盛園煤業有限公司) and Baotou Aluminum Jinxi Logistics

Co., Ltd. (包頭鋁業錦璽物流有限責任公司) , respectively.

CASH AND CASH EQUIVALENTS

As of June 30, 2013, the Group’s cash and cash equivalents amounted to RMB10,408 million, including

foreign currency deposits of RMB353.32 million, RMB10.08 million, RMB4.44 million, RMB3.23 million

and RMB1.54 million denominated in US dollars, Hong Kong dollars, Euro, Australian dollars and

Indonesian Rupiah, respectively.

CASH FLOWS FROM OPERATING ACTIVITIES

For the first half of 2013, the Group’s cash inflows generated from operating activities amounted to

RMB1,662 million, representing an increase of RMB3,477 million from the net outflows of RMB1,815

million for the corresponding period of the preceding year, mainly attributable to an increase in the

profit margin of the Group’s major products, as well as the reinforced management on current assets

and current liabilities by means of lean management of the cash flows.


2013 INTERIM REPORT

CASH FLOWS FROM INVESTING ACTIVITIES

For the first half of 2013, the Group’s cash outflows generated from the investing activities amounted

to RMB6,350 million, representing a decrease of RMB9,718 million from the net cash outflows of

RMB16,068 million for the corresponding period of the preceding year, mainly attributable to the

acquisition of the Simandou Project by the Group in the corresponding period of the preceding year and

the significant decrease in investment in the current period.

CASH FLOWS FROM FINANCING ACTIVITIES

For the first half of 2013, the Group’s cash inflows generated from financing activities amounted to

RMB5,951 million, representing a decrease of RMB11,189 million from the net inflows of RMB17,140

million for the corresponding period of the preceding year, mainly attributable to the decrease of

financing scale resulted from the improvement in the cash flows from operating activities of the Group

as well as the significant decrease in investments.

INVESTMENT OF THE COMPANY

USE OF PROCEEDS

During the reporting period, no fund raising proceeds were utilized by the Group.

PROJECTS NOT FUNDED BY PROCEEDS

(1) The alumina project in Xing County of Shanxi Huaxing Alumina Co., Ltd.* (山西華興鋁業興縣氧化

鋁項目): The proposed investment in project construction is RMB4,621 million. As of June 30, 2013,

RMB3,286 million of capital expenditure had been incurred. The project is expected to commence

production in October 2013, with an alumina plant of the production capacity of 800,000 tonnes

per year and a bauxite mine of the production capacity of 990,000 tonnes per year.

(2) The captive power plant Project in Baotao Aluminum (包頭鋁業自備電廠項目): The proposed

investment in project construction amounted to RMB2,715 million. As of June 30, 2013, RMB890

million of capital expenditure had been incurred. The project is expected to be completed in August

2014, with an electricity production capacity for electrolytic aluminum production of 3.928 billion

kWh per year.

26

DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

In accordance with Articles 104 and 145 of the Company’s Articles of Association, all Directors and

Supervisors of the Company were appointed for a term of three years, eligible for re-appointments

after expiry of their respective terms of office. The Directors of the fifth session of the Board and the

shareholder representative supervisors of the fifth session of the Supervisory Committee were elected

at the 2012 annual general meeting held on June 27, 2013 and the 2013 first extraordinary general

meeting held on 30 August 2013. The employee representative supervisor of the fifth session of the

Supervisory Committee of the Company was elected by the employee representatives of the Company

and its subsidiaries and branches.

Members of the fifth session of the Board and the fifth session of the Supervisory Committee are as

below:

Executive Directors : Xiong Weiping, Luo Jianchuan,

Liu Xiangmin and Jiang Yinggang

Non-executive Directors : Liu Caiming and Wang Jun

Independent Non-executive Directors : Wu Jianchang, MA Si-hang, Frederick and Wu Zhenfang

Supervisors : Zhao Zhao, Yuan Li and Zhang Zhankui

During the reporting period, there was no change in the respective shareholdings of the Directors,

Supervisors, and senior management of the Company.

EMPLOYEES, PENSION PLANS AND WELFARE FUND

As of June 30, 2013, the Group had 103,493 employees. For the first half of 2013, the Group had paid

the total remuneration of approximately RMB3,637 million to its employees. In particular, as Ningxia

Energy was consolidated into the financial statements of the Company in 2013, there are an additional

7,787 employees and an additional remuneration of RMB319 million. The remuneration package of

the employees includes salaries, bonuses, subsidies, allowances and welfare benefits including medical

care, housing subsidies, childbirth, unemployment, work injury, pension, labor union fees, employees’

education fees and other miscellaneous items.


2013 INTERIM REPORT

In accordance with the applicable regulations of the PRC, the Group has participated in pension

contribution plans organized by the provincial and municipal governments, under which each of the

Group’s plants is required to contribute an amount equivalent to a specified percentage of the sum of its

employees’ salaries, bonuses and various allowances to the pension fund. The amount of contribution of

each plant was around 20% of the employees’ salary.

PARTICULARS OF SHARE CAPITAL STRUCTURE, CHANGES AND SHAREHOLDERS

SHARE CAPITAL STRUCTURE

As of June 30, 2013, the share capital structure of the Company was as follows:

As of June 30, 2013

Number of

shares held

Percentage to

issued share

capital

(in million) (%)

Holders of A shares 9,580.52 70.84

Among which: Aluminum Corporation

of China (“Chinalco”) 5,214.41 38.56

Baotou Aluminum (Group) Co., Ltd. (Note 1) 321.14 2.37

Lanzhou Aluminum Factory (Note 1) 79.47 0.59

Shanxi Aluminum Plant (Note 1) 7.14 0.05

Guiyang Aluminum Magnesium 4.12 0.03

Design and Research Institute (Note 1)

Holders of H shares 3,943.97 29.16

Total 13,524.49 100

Note 1: These are subsidiaries of and/or enterprises controlled by Chinalco.

28

SUBSTANTIAL SHAREHOLDERS WITH SHAREHOLDING OF 5% OR MORE

So far as the Directors are aware, as of June 30, 2013, the following persons (other than the Directors,

Supervisors and Chief Executive of the Company) had interests or short positions in the shares or

underlying shares of the Company which would fall to be disclosed under the provisions of Divisions 2

and 3 of Part XV of the Securities and Futures Ordinance (“Hong Kong SFO”) or which were recorded in

the register required to be kept by the Company pursuant to Section 336 of the Hong Kong SFO, or as

otherwise notified to the Company and The Stock Exchange of Hong Kong Limited (“Hong Kong Stock

Exchange”).

Name of substantial

shareholder

Class of

shares

Number of

shares held Capacity

Percentage in

the relevant class

of issued share

capital

Percentage in

total issued

share capital

Chinalco A Shares 5,626,277,799(L)

(Note 1)

Beneficial owner

and interests of

controlled corporations

58.73%(L) 41.60%(L)

China Cinda Asset

Management Co., Ltd.

A Shares 800,759,074(L) Beneficial owner 8.36%(L) 5.92%(L)

China Construction Bank

Corporation Limited

A Shares 609,146,645(L) Beneficial owner 6.36%(L) 4.50%(L)

Templeton Asset

Management Ltd.

H Shares 1,059,274,800(L) Investment manager 26.86%(L) 7.83%(L)

(L) The letter “L” denotes a long position.

Notes:

1. These interests included the interest of 5,214,407,195 A shares directly held by Chinalco, and an aggregate interest in

411,870,604 A shares held by various entities controlled by Chinalco, comprising 321,138,295 A shares held by Baotou

Aluminum (Group) Co., Ltd., 79,472,482 A shares held by Lanzhou Aluminum Factory, 4,119,573 A shares held by Guiyang

Aluminum Magnesium Design and Research Institute and 7,140,254 A shares held by Shanxi Aluminum Plant.


2013 INTERIM REPORT

Save as disclosed above and so far as the Directors are aware, as of June 30, 2013, no other person

had an interest or short position in the shares or underlying shares of the Company (as the case may

be) which would fall to be disclosed to the Company and the Hong Kong Stock Exchange under the

provisions of Divisions 2 and 3 of Part XV of the Hong Kong SFO and as recorded in the register required

to be kept under section 336 of the Hong Kong SFO, or was otherwise a substantial shareholder of the

Company.

CHANGES IN SHARE CAPITAL

During the reporting period, there were no changes in the share capital of the Company.

APPROVAL OF CHANGES IN SHARE CAPITAL

Not applicable.

TOTAL NUMBER OF SHAREHOLDERS AT THE END OF THE REPORTING PERIOD

As of June 30, 2013, the Company had 517,198 shareholders (including 516,281 holders of A shares

and 917 holders (registered shareholders) of H shares).

30

SHAREHOLDINGS OF THE TOP TEN SHAREHOLDERS

Unit: share

Name of shareholder Nature of shareholder

Percentage of

total issued

shares

Total

number of

shares held

Increase/decrease

of shares during the

reporting period Note

(%)

Chinalco # State 38.56 5,214,407,195 #

HKSCC Nominees Limited Overseas legal person 29.02 3,924,957,344 Increased by 677,402

China Cinda Asset Management Co., Ltd. State-owned legal person 5.92 800,759,074

China Construction Bank Corporation Limited State-owned legal person 4.50 609,146,645

Guokai Financial Limited Company State-owned legal person 3.07 415,168,145

Baotou Aluminum (Group) Co., Ltd. State-owned legal person 2.37 321,138,295 Decreased by 10,079,500

Lanzhou Aluminum Factory State-owned legal person 0.59 79,472,482

Guizhou Provincial Materials Development

and Investment Corporation State-owned legal person 0.34 45,800,000 Decreased by 13,200,000

29,000,000

(pledged)

Guangxi Investment Group Co., Ltd. State-owned legal person 0.29 39,259,793

Bank of China Limited-Jianshi Hushen 300 Domestic non-state-owned

Trading Open-end Index

Securities Investment Fund legal person 0.13 17,448,823 Decreased by 5,330,721

# This figure does not include the A shares indirectly held by Chinalco through its subsidiaries and/or controlled entities.


2013 INTERIM REPORT

INTERESTS IN SHARES HELD BY DIRECTORS, CHIEF EXECUTIVE AND SUPERVISORS

As of June 30, 2013, none of the Directors, Chief Executive, or Supervisors and their respective

associates had any interests or short positions in the shares, underlying shares or debentures of the

Company or any of its associated corporations (within the meaning of the Hong Kong SFO) which are

(a) required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions

7 and 8 of Part XV of the Hong Kong SFO; or (b) required to be recorded in the register kept by the

Company pursuant to Section 352 of the Hong Kong SFO; or (c) required to be notified to the Company

and the Hong Kong Stock Exchange pursuant to the Model Code for Securities Transactions by Directors

of Listed Companies. For the six months ended June 30, 2013, none of the Directors, Supervisors, senior

management or their spouses or children under the age of 18 was granted the right to acquire any

shares or debentures of the Company or any of its associated corporations (within the meaning of the

Hong Kong SFO).

REPURCHASE, SALE AND REDEMPTION OF THE COMPANY’S SHARES

During the reporting period, neither the Company nor its subsidiaries purchased or sold any of their

shares during the six months ended June 30, 2013.

CHARGE AND PLEDGES ON GROUP ASSETS

As of June 30, 2013, the Group charged and pledged assets with a total amount of RMB9,918 million,

including property, plant and equipment, land use rights, intangible assets, inventories and investments

in an associate for bank loans. Details refer to Note 11(f) to the financial statements.

32

EXTERNAL GUARANTEES PROVIDED BY THE COMPANY

As of June 30, 2013, the Company provided external guarantees with a total balance of RMB5.929

billion. Details are as follows:

On January 20, 2012, Ningxia Energy and Ningxia branch of China Development Bank entered into the

Contract of Pledge for Accounts Receivables of RMB Loan, and offered a pledge guarantee in respect of

the loan of RMB30 million for Ningxia Power Investment Corporation. The guarantee would expire upon

expiry of the debt performance period under the principal contract. As at the reporting date, the balance

of the several liability guarantee provided by Ningxia Energy to Ningxia Power Investment Corporation

was RMB30 million.

In November 2011, the Company entered into the guarantee agreement with Natixis, being the agent

for a consortium of lender. The guarantee would expire upon expiry of the debt performance period

under the principal contract. As at the reporting date, the Company provided a several liability guarantee

in respect of the loan of the USD300 million for Chalco Trading Hong Kong Co., Limited, a wholly-

owned subsidiary of the Company.

In March 2012, the Company entered into the US dollars facility guarantee contract with China

Development Bank, pursuant to which the Company will provide several liability guarantee in respect

of a loan of up to USD702 million in total of Chalco Hong Kong Limited, a wholly-owned subsidiary of

the Company. The guarantee period is two years from the date of expiry of the term for performance

of loan under the principal contract. As at the reporting date, Chalco Hong Kong Limited drew down a

loan of USD438.75 million, and the balance of the several liability guarantee provided by the Company

to Chalco Hong Kong Limited was USD438.75 million.

In March 2013, the Company entered into the guarantee contract with China Development Bank,

pursuant to which the Company will provide guarantee in respect of a loan of up to RMB1,020 million

in total in proportion to its 34% shareholding for Shanxi Jiexiu Xinyugou Coal Co., Ltd. (山西介休鑫峪

溝煤業有限公司), a joint venture of the Company. The guarantee period is two years from the date of

expiry of the term for performance of loan under the principal contract. As at the reporting date, Shanxi

Jiexiu Xinyugou Coal Co., Ltd. drew down a loan of RMB920 million, and the balance of the guarantee

provided by the Company to Shanxi Jiexiu Xinyugou Coal Co., Ltd. was RMB312.8 million.


2013 INTERIM REPORT

As at the reporting date, the guarantee provided by Ningxia Energy to its subsidiaries amounted to

a total of RMB886.8 million and the guarantee provided by Ning Xia Yin Xing Energy Co., Ltd. to its

subsidiaries amounted to a total of RMB170 million.

Save as aforesaid, there were no other external guarantees provided by the Company which were

required to be disclosed.

CORPORATE GOVERNANCE

The Articles of Association, the Terms of Reference of the Audit Committee, the Terms of Reference of

the Supervisory Committee and the Code of Conduct Regarding Securities Transactions by the Directors,

Supervisors and Relevant Employees form the framework for the code of corporate governance practices

of the Company. The Board has reviewed its corporate governance documents and internal control

guidelines, and is of the view that such documents have incorporated most of the principles and code

provisions in the “Code on Corporate Governance Practices” (the “CG Code”) as set out in Appendix

14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the

“Hong Kong Listing Rules”) and the requirements under the Internal Control Guidelines stipulated by the

Shanghai Stock Exchange.

During the reporting period, saved as disclosed below, the Board is of the opinion that the Company

has complied with the code provisions of the CG Code and the requirements under the Internal Control

Guidelines stipulated by the Shanghai Stock Exchange.

Rule A.2.1 of the CG Code provides that, inter alia, the roles of chairman and chief executive should

be separated and should not be performed by the same individual. The chairman and chief executive

of the Company were served by one person. On May 9, 2013, the Board considered and approved the

resolution in respect of the cancellation of the position of chief executive officer for the Company’s

operational and management needs with effect from the conclusion of the Board meeting. As a result,

the Company has since complied with the requirements of Rule A.2.1 of the CG Code.

34

Pursuant to Rule 3.10(1) of the Hong Kong Listing Rules, every board of directors of a listed issuer must

include at least three independent non-executive directors. Pursuant to the Articles of Association and

the Terms of Reference of the Audit Committee, the audit committee must comprise a minimum of three

independent non-executive directors. Before the proposal of electing members of the fifth session of the

Board at the 2012 annual general meeting of the Company, the Company had not selected a candidate

for independent non-executive director. Therefore, since June 27, 2013, the number of independent

non-executive directors and members of the audit committee of the Company had been lower than the

minimum number as required in Rule 3.10(1) and Rule 3.21 of the Hong Kong Listing Rules. On August

30, 2013, the Company appointed Mr. Wu Zhenfang as an independent non-executive director and a

member of the audit committee of the Company. As such, the Company had been in compliance with

Rule 3.10(1) and Rule 3.21 of the Hong Kong Listing Rules.

CODE OF CONDUCT FOR SECURITIES TRANSACTIONS BY THE DIRECTORS, SUPERVISORS AND RELEVANT EMPLOYEES

For clarity, the Company has adopted a Code of Conduct Regarding Securities Transactions by the

Directors, Supervisors and Relevant Employees (the “Required Standards”) on terms no less exacting than

the required standard of dealings set out in the “Model Code for Securities Transactions by Directors

of Listed Companies” in Appendix 10 to the Hong Kong Listing Rules. Some employees who are likely

to be in possession of unpublished price sensitive information of the Group shall be in compliance with

the Required Standards. All Directors, Supervisors and Relevant Employees, upon specific enquiries, have

confirmed that they have complied with the Required Standards during the six months ended June 30,

2013.


2013 INTERIM REPORT

AUDIT COMMITTEE

The Company has established an audit committee with written terms of reference based on the

guidelines recommended by the Hong Kong Institute of Certified Public Accountants. The primary duties

of the audit committee are to review the financial report of the Company, review the appointment of

independent auditors, approve the auditing and provide audit-related services as well as monitor the

internal financial reporting process and management policies of the Company.

As of the reporting date, the Audit Committee of the fifth session of the Board of the Company consists

of three independent non-executive Directors, namely Mr. Wu Jianchang, Mr. Ma Si-hang, Frederick and

Mr. Wu Zhenfang. Mr. Ma Si-hang, Frederick is the Chairman of the Committee.

The Audit Committee and the management have reviewed the accounting policies and practices adopted

by the Group and discussed auditing, internal control and financial statements matters, including the

review of the unaudited interim condensed consolidated financial information for the six months ended

June 30, 2013.

In the first half of 2013, the Audit Committee convened four meetings in total, including the seventeenth

meeting of the Audit Committee of the fourth session of the Board held on March 20, 2013, at which

thirteen proposals including the 2012 Financial Report were considered; the eighteenth meeting of the

Audit Committee of the fourth session of the Board held on April 25, 2013, at which two proposals

including the 2013 First Quarterly Financial Report of the Company were considered; the nineteenth

meeting of the Audit Committee of the fourth session of the Board held on May 8, 2013, at which three

proposals including proposed transfer of the equity interests held by the Company in relevant enterprises

engaged in aluminum fabrication business were considered; and the twentieth meeting of the Audit

Committee of the fourth session of the Board held on May 13, 2013, at which the proposal on disposal

of its loans owed by Chalco Henan Aluminum Co., Ltd. (中鋁河南鋁業有限公司) and Chalco Qingdao

Light Metal Company Limited (中鋁青島輕金屬有限公司) was considered.

36

SIGNIFICANT EVENTS

1. CORPORATE GOVERNANCE

The Company has strictly complied with the requirements of the Company Law of the People’s

Republic of China (the “Company Law”), the Securities Law of the People’s Republic of China (the

“Securities Law”), the relevant provisions of China Securities Regulatory Commission and Shanghai

Stock Exchange Listing Rules (the “Shanghai Stock Exchange Listing Rules”) and duly performed

its corporate governance obligations in line without being deviated from the relevant requirements

issued by China Securities Regulatory Commission. The Company has also strictly complied with

the Hong Kong Listing Rules and its latest amendments’ requirements in relation to corporate

governance. The Company has established a corporate governance structure with clearly defined

rights and responsibilities with effective check, balance and coordination. General meetings, board

of directors and the supervisory committee safeguarded the interests of investors and shareholders

by fulfilling their own responsibilities and operated in compliance with regulations. During

the reporting period, the Company elected the new session of the Board and the supervisory

committee in compliance with the relevant laws and regulations.

The Company will continue to be in strict compliance with the requirements of the regulatory

bodies including China Securities Regulatory Commission, Beijing Securities Regulatory Bureau,

Shanghai Stock Exchange, Hong Kong Stock Exchange and New York Stock Exchange. Through

regulatory compliance and strict self-regulation, the Company will continuously improve its various

corporate governance systems to further enhance its corporate governance and internal control

system, aiming at protecting the interest of shareholders of the Company, and the Company

will maintain consistent, stable and healthy development to bring returns to the society and

shareholders through satisfactory performance results. The Company will also continue to comply

with the requirements on corporate governance under the Hong Kong Listing Rules.

Since its incorporation, the Company has been completely separated from its controlling

shareholder in terms of business, employees, assets and finance. The Company has independent

and comprehensive business and has the ability to operate on its own.


2013 INTERIM REPORT

2. ASSETS TRANSACTIONS

Reference is made to the announcements of the Company dated August 13, 2012 and December

31, 2012 in relation to the acquisition of equity interests in Ningxia Energy.

On January 23, 2013, the Company obtained 70.82% of the total equity of Ningxia Energy

through step acquisitions, thus Ningxia Energy became a non-wholly-owned subsidiary of the

Company and has been consolidated into the consolidated financial statements of the Company

since January 23, 2013.

Except for several disposals of assets and equities that involved connected transactions (please

refer to the announcements dated June 6, 2013 and June 11, 2013 and the circular dated

June 7, 2013), there were no significant assets transactions of the Company required to be

disclosed during the reporting period.

3. DISTRIBUTION OF FINAL DIVIDEND FOR THE YEAR 2012

The non-distribution of the 2012 final dividends of the Company was considered and approved at

the 2012 annual general meeting on June 27, 2013.

4. MATERIAL LITIGATION AND ARBITRATION

There was no material litigation and arbitration during the reporting period.

5. MATERIAL CONNECTED TRANSACTIONS OF THE GROUP DURING THE

REPORTING PERIOD

Connected transactions related to daily operations

During the reporting period, the total amount of major and continuing connected transactions

between the Group and connected persons was approximately RMB7.0 billion, of which purchase

transactions amounted to RMB4.1 billion and sales transactions amounted to RMB2.9 billion

(including provision of products and services).

38

All of the above connected transactions during the reporting period have been conducted under

the relevant agreements which have been published by way of announcement. The continuing

connected transactions of the Group were mainly transactions between the Group and Chinalco.

Connected transactions related to acquisition and disposal of assets

Disposal of assets of the alumina production line of Guizhou branch of the

Company

On June 6, 2013, the Company and Guizhou Aluminum Plant, the subsidiary of Chinalco, entered

into the transfer agreement on the alumina assets (including the liabilities) of Guizhou branch.

The Company would transfer the alumina assets of Guizhou branch to Guizhou Aluminum Plant

of Chinalco with reference to the appraised value and the consideration shall be paid in five

instalments, and the gains and losses relating to the abovementioned assets for the first half of

2013 would be undertaken by the Company. For details on the assets transfer, please refer to the

announcement dated June 6, 2013 and the circular dated June 7, 2013.

Disposal of assets of Northwest Aluminum Fabrication branch

On June 6, 2013, the Company and Northwest Aluminum Fabrication Plant, the subsidiary of

Chinalco, entered into an assets transfer agreement on the assets (including the liabilities) of the

Northwest Aluminum Fabrication branch. The Company would transfer the assets of Northwest

Aluminum Fabrication branch to Northwest Aluminum Fabrication Plant of Chinalco with reference

to the appraised value and the consideration shall be paid in five instalments, and the gains and

losses relating to the abovementioned assets for the first half of 2013 would be undertaken by the

Company. For details on the assets transfer, please refer to the announcement dated June 6, 2013

and the circular dated June 7, 2013.


2013 INTERIM REPORT

Overall disposal of equity in aluminum fabrication entities

On May 13, 2013, the Company intended to dispose its aluminum fabrication equities in eight

aluminum fabrication entities (the eight entities included Chalco Henan, Chalco Qingdao, Chalco

Ruimin, Chalco Southwest Aluminum, Chalco Southwest Cold Rolling, Huaxi Aluminum, Chalco

Sapa and Guizhou Chalco) by way of open tender at Beijing Equity Exchange. On June 7, 2013,

Chinalco won the bid for the equities of the target enterprises at the tender price. On June 9,

2013, the two parties entered into relevant equity transfer agreement and the supplementary equity

exchange agreement, and their major terms are set out as follows: the transfer price is the listing

price, and the gains and losses relating to the abovementioned assets for the first half of 2013

would be undertaken by the Company, and Chinalco would pay the transfer price of equities to the

Company in cash by two instalments. As an additional condition for the overall transfer of the target

of transfer, as at December 31, 2012, the Company’s entrusted loans to Chalco Henan Aluminum

Co., Ltd. and Chalco Qingdao Light Metal Company Limited should be transferred to Chinalco with

a nominal principal amount up to RMB3 billion, and the consideration shall be determined with

reference to appraisal value of such loans. For details for the transfer of equity interests, please refer

to the announcement dated June 9, 2013 and the circular dated June 7, 2013.

Transfer of loans

On May 13, 2013, the Company intended to dispose its equity interests in eight aluminum

fabrication entities by way of open tender at Beijing China Equity Exchange. The transfer of the

Company’s loans to Chalco Henan and Chalco Qingdao was one of the additional conditions. On

June 9, 2013, the Company and Chinalco entered into a loan transfer agreement and transferred

the abovementioned loan at appraised value, pursuant to which Chinalco shall pay such payment to

the Company in cash in five equal instalments. For details of the transfer of loans, please refer to

the announcement dated June 9, 2013 and the circular dated June 7, 2013.

6. PERFORMANCE OF UNDERTAKINGS

The following undertakings by Chinalco were made during or subsisting in the reporting period:

During the initial issuance of A Shares of the Company, Chinalco provided undertakings principally

in relation to non-competition, including:

Chinalco will arrange to dispose of its aluminum fabrication business, or the Company will acquire

the aluminum fabrication business from Chinalco, and acquire the pseudo-boehmite business from

Chinalco within a certain period of time following the listing of the Company’s A shares.

40

Besides, the Company provided additional undertakings:

On August 22, 2011, the Company issued a letter of undertaking of Aluminum Corporation of

China Limited* to resolve the horizontal competition with Jiaozuo Wanfang Aluminum Company

Limited (hereafter, “Jiaozuo Wanfang”) in the aluminum business (中國鋁業股份有限公司關於解

決與焦作萬方鋁業股份有限公司電解鋁業務同業競爭的承諾函), pursuant to which it undertook

to make its best endeavors to eliminate by proper means the competition in aluminum business

with Jiaozuo Wanfang within five years.

There is no competition in aluminum fabrication business between the Company and Chinalco.

Up till now, both Shanxi Aluminum Factory, a wholly-owned subsidiary of Chinalco, and the

Shandong branch of the Company had minor activities in the pseudo-boehmite market. However,

as the pseudo-boehmite business is not among the principal activities of the Company, the

revenue from sales of that segment made up a relatively low portion of the Company’s revenue

and as the sales locations of pseudo-boehmite of Shandong branch and Shanxi Aluminum Factory

are different, the competition between Chinalco and the Company in respect of pseudo-boehmite

business is limited.

Since the market conditions for pseudo-boehmite are immature, Chinalco does not propose to

inject its pseudo-boehmite business to the Company’s portfolio for the time being.

In April 2013, Jiaozuo Wanfang issued 169,266,914 A shares through non-public offering to five

companies including Manulife Teda Fund Management Co., Ltd. (泰達宏利基金管理有限公司) and

Yinhua Fund Management Co., Ltd. (銀華基金管理有限公司). After the completion of the non-

public offering of A shares, the Company’s shareholding in Jiaozuo Wanfang fell from 24.002%

to 17.75%. On July 24, 2013, Jiaozuo Wanfang held the third extraordinary meeting for 2013 to

consider and approve the proposed amendments to the articles of association and the proposed

election of additional two independent directors. Jiaozuo Wanfang became a public company

without controlling shareholders and actual controller. There was no competition within the same

business between the Company and Jiaozuo Wanfang any longer.

When conditions become mature, both Chinalco and the Company will continue to duly

implement the matters undertaken within the time limit.


2013 INTERIM REPORT

7. OTHER SIGNIFICANT EVENTS

Non-public Offering of A shares

On August 24, 2012, the twenty-ninth meeting of the fourth session of the Board of the

Company resolved to propose to issue not more than 1.45 billion A shares in the PRC to qualified

legal persons, natural persons, or other legally qualified investors. On October 12, 2012, SASAC

approved such resolution. At the 2nd Extraordinary General Meeting for 2012, the second Meeting

for Holders of A Shares for 2012 and the second Meeting for Holders of H Shares for 2012

held on October 12, 2012, the shareholders also considered and approved the non-public issue

plan and related matters. On December 7, 2012, Issuance Examination Committee of the China

Securities Regulatory Commission (CSRC) approved the application to issue A shares through non-

public offering, and the application of issuing A shares through non-public offering was approved

unconditionally. On March 14, 2013, the Company received the approval from CSRC to issue new

shares of no more than 1.45 billion through non-public offering, effective within the six months

from the date of the approval. As at the date of the publication of this report, no such issuance

had occurred.

For details of the matter, please refer to the announcements of the Company dated October 12,

2012 and March 14, 2013.

Change in the shareholding of Jiaozuo Wanfang

As of December 31, 2012, the registered capital of Jiaozuo Wanfang, the non-wholly-owned

subsidiary of the Company was RMB480,176,100. The Company held 24.002% of its shares as the

largest shareholder. In April 2013, Jiaozuo Wanfang issued 169,266,914 A shares through non-

public offering to five companies including Manulife Teda Fund Management Co., Ltd. (泰達宏利

基金管理有限公司) and Yinhua Fund Management Co., Ltd. (銀華基金管理有限公司). After the

completion of non-public offering of A shares, the registered capital of Jiaozuo Wanfang increased

to RMB649,443,014, and the Company’s shareholding in Jiaozuo Wanfang fell from 24.002%

to 17.75%. Since April 19, 2013, Jiaozuo Wanfang had been excluded from the consolidated

financial statements of the Group.

42

INDEPENDENT REVIEW REPORT

To the shareholders of Aluminum Corporation of China Limited

(Established in the People’s Republic of China with limited liability)

Introduction

We have reviewed the interim financial information set out on page 44 to 136, which comprise the

condensed consolidated statement of financial position of Aluminum Corporation of China Limited (the

“Company”) and its subsidiaries (together the “Group”) as at June 30, 2013 and the related condensed

consolidated statements of comprehensive income, changes in equity and cash flows for the six-month

then ended, and a summary of significant accounting policies and other explanatory notes. The Main

Board Listing Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

require the preparation of a report on interim financial information to be in compliance with the relevant

provisions thereof and International Accounting Standard 34 Interim Financial Reporting (“IAS 34”). The

directors of the Company are responsible for the preparation and presentation of this interim financial

information in accordance with IAS 34. Our responsibility is to express a conclusion on this interim

financial information based on our review. Our report is made solely to you, as a body, in accordance

with our agreed terms of engagement, and for no other purpose. We do not assume responsibility

towards or accept liability to any other person for the contents of this report.


2013 INTERIM REPORT

INDEPENDENT REVIEW REPORT (CONTINUED)

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410,

Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of

interim financial information consists of making inquiries, primarily of persons responsible for financial

and accounting matters, and applying analytical and other review procedures. A review is substantially

less in scope than an audit conducted in accordance with International Standards on Auditing and

consequently does not enable us to obtain assurance that we would become aware of all significant

matters that might be identified in an audit. Accordingly, we do not express such opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim

financial information is not prepared, in all material respects, in accordance with IAS 34.

Ernst & Young

Certified Public Accountants

22/F, CITIC Tower,

1 Tim Mei Avenue, Central

Hong Kong

August 30, 2013

44

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAs at June 30, 2013

(Amounts expressed in thousands of RMB unless otherwise stated)

NotesJune 30,

2013December 31,

2012(Audited)

ASSETS

Non-current assets Intangible assets 7 10,680,291 4,260,018 Property, plant and equipment 7 99,975,769 96,248,091 Land use rights and leasehold land 2,849,092 2,594,208 Investments in joint ventures 8 2,135,816 1,936,950 Investments in associates 8 15,748,775 17,211,965 Available-for-sale financial investments 92,652 64,500 Deferred tax assets 2,049,018 2,116,986 Other non-current assets 5,669,569 1,568,148

Total non-current assets 139,200,982 126,000,866

Current assets Inventories 25,235,475 25,596,476 Trade and notes receivables 9 6,907,215 2,615,862 Other current assets 20,193,371 9,851,418 Financial assets at fair value through profit or loss 343 8,983 Restricted cash and time deposits 542,978 1,128,015 Cash and cash equivalents 10,407,732 9,063,593

63,287,114 48,264,347

Assets of a disposal group classified as held for sale 10 — 751,669

Total current assets 63,287,114 49,016,016

Total assets 202,488,096 175,016,882


2013 INTERIM REPORT

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)As at June 30, 2013


Notes

June 30,

2013

December 31,

2012

(Audited)

EQUITY AND LIABILITIES

Equity

Equity attributable to the owners of the parent

Share capital 13,524,488 13,524,488

Other reserves 19,631,360 19,930,226

Retained earnings

— proposed final dividend — —

— others 9,756,604 10,353,049

42,912,452 43,807,763

Non-controlling interests 11,411,415 9,963,387

Total equity 54,323,867 53,771,150

Liabilities

Non-current liabilities

Interest-bearing loans and borrowings 11 50,937,727 36,635,652

Deferred tax liabilities 1,115,215 —

Other non-current liabilities 2,442,579 756,669

Total non-current liabilities 54,495,521 37,392,321

46

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)As at June 30, 2013


Notes

June 30,

2013

December 31,

2012

(Audited)

Current liabilities

Financial liabilities at fair value through profit or loss 12,493 12,662

Interest-bearing loans and borrowings 11 70,887,958 67,915,181

Other payables and accrued expenses 9,048,222 8,805,315

Trade and notes payables 12 13,635,588 7,059,194

Income tax payable 84,447 61,059

Total current liabilities 93,668,708 83,853,411

Total liabilities 148,164,229 121,245,732

Total equity and liabilities 202,488,096 175,016,882

Net current liabilities (30,381,594) (34,837,395)

Total assets less current liabilities 108,819,388 91,163,471

The accompanying notes are an integral part of the financial statements.

Xiong Weiping Xie Weizhi

Director Chief Financial Officer


2013 INTERIM REPORT

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the six months ended June 30, 2013


For the six months

ended June 30

Notes 2013 2012

(Restated)

Continuing operations

Revenue 5 71,113,213 66,769,396

Cost of sales (69,768,380) (66,435,876)

Gross profit 1,344,833 333,520

Selling and distribution expenses 13 (847,465) (899,082)

General and administrative expenses 14 (1,257,276) (1,213,101)

Research and development expenses (82,279) (68,200)

Other income 15 527,771 267,956

Other gains/(losses), net 15 1,740,794 (178,236)

Operating profit/(loss) from

continuing operations 1,426,378 (1,757,143)

Finance income 16 160,532 111,729

Finance costs 16 (2,766,326) (2,151,710)

Share of profits of:

Joint ventures 8 44,814 12,500

Associates 8 247,481 143,702

48

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (CONTINUED)For the six months ended June 30, 2013


For the six months

ended June 30

Notes 2013 2012

(Restated)

Loss before income tax

from continuing operations (887,121) (3,640,922)

Income tax benefit from continuing operations 17 33,650 724,717

Loss for the period from continuing operations (853,471) (2,916,205)

Discontinued operation

Profit/(loss) for the period

from discontinued operation 6 207,144 (508,563)

Loss for the period (646,327) (3,424,768)

Loss attributable to:

Owners of the parent (596,445) (3,253,255)

Non-controlling interests (49,882) (171,513)

(646,327) (3,424,768)


2013 INTERIM REPORT



For the six months

ended June 30

Notes 2013 2012

(Restated)

(Loss)/profit attributable to owners of

the parent arising from:

Continuing operations (832,358) (2,790,005)

Discontinued operation 235,913 (463,250)

(596,445) (3,253,255)

Other comprehensive loss, net of tax:

Other comprehensive loss to be reclassified to

profit or loss in subsequent periods:

Exchange differences on translation of

foreign operations (172,212) (6,306)

Net other comprehensive loss to be reclassified

to profit or loss in subsequent periods (172,212) (6,306)

Total other comprehensive loss

for the period, net of tax (172,212) (6,306)

Total comprehensive loss for the period (818,539) (3,431,074)

50



For the six months

ended June 30

Notes 2013 2012

(Restated)

Total comprehensive loss for

the period attributable to:

Owners of the parent (742,560) (3,259,561)

Non-controlling interests (75,979) (171,513)

(818,539) (3,431,074)

Basic and diluted (loss)/earning per share

attributable to ordinary equity holders of the

parent (expressed in RMB per share)

From continuing operations 18 (0.06) (0.21)

From discontinued operation 6,18 0.02 (0.03)

(0.04) (0.24)

Details of the dividends payable and proposed for the six months ended June 30, 2013 are disclosed in

note 19 to the financial statements.



2013 INTERIM REPORT

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the six months ended June 30, 2013


Attributable to owners of the parent

Capital reserves

Share capital

Share premium

Other capital

reserves

Statutory surplus reserve

Special reserve

Exchange fluctuation

reserveRetained earnings Total

Non-controlling

interestsTotal

equity

At January 1, 2013 13,524,488 13,097,117 890,741 5,867,557 92,193 (17,382) 10,353,049 43,807,763 9,963,387 53,771,150

Loss for the period — — — — — — (596,445) (596,445) (49,882) (646,327)

Other comprehensive loss for the period Exchange differences on translation of foreign operations — — — — — (146,115) — (146,115) (26,097) (172,212)

Total comprehensive loss — — — — — (146,115) (596,445) (742,560) (75,979) (818,539)

Release of deferred government subsidies — — 6,700 — — — — 6,700 — 6,700 Acquisition of subsidiaries (note 22) — — — — — — — — 3,710,790 3,710,790 Discontinued operation (note 6) — — — — — — — — (324,539) (324,539) Disposal of a subsidiary (note 23(a)) — — (257,529) — — — — (257,529) (1,931,114) (2,188,643) Capital injection from non-controlling shareholders — — — — — — — — 42,808 42,808 Other appropriations — — — — 92,383 — — 92,383 16,978 109,361 Share of reserves of associates (note 8) — — — — 5,695 — — 5,695 9,084 14,779

At June 30, 2013 13,524,488 13,097,117 639,912 5,867,557 190,271 (163,497) 9,756,604 42,912,452 11,411,415 54,323,867

52

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)For the six months ended June 30, 2013


Attributable to owners of the parent

Capital reserves

Share capital

Share premium

Other capital reserves

Statutory surplus reserve

Special reserve

Exchange fluctuation

reserveRetained earnings Total

Non-controlling

interestsTotal

equity

At January 1, 2012 13,524,488 12,846,728 945,777 5,867,557 90,780 (36,134) 18,586,803 51,825,999 6,328,687 58,154,686

Loss for the period — — — — — — (3,253,255) (3,253,255) (171,513) (3,424,768)

Other comprehensive loss for the period: Exchange differences on translation of foreign operations — — — — — (6,306) — (6,306) — (6,306)

Total comprehensive loss — — — — — (6,306) (3,253,255) (3,259,561) (171,513) (3,431,074)

Release of deferred governmental subsidies — — 106,340 — — — — 106,340 — 106,340 Capital injection from non-controlling shareholders — — — — — — — — 5,300 5,300 Other appropriations — — — — 16,185 — — 16,185 3,318 19,503 Share of reserves of associates — — — — 5,464 — — 5,464 9,404 14,868 Dividends paid by subsidiaries to non-controlling shareholders relating to 2011 — — — — — — — — (17,501) (17,501)

At June 30, 2012 13,524,488 12,846,728 1,052,117 5,867,557 112,429 (42,440) 15,333,548 48,694,427 6,157,695 54,852,122



2013 INTERIM REPORT

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWSFor the six months ended June 30, 2013


For the six monthsended June 30

Notes 2013 2012

Net cash flows from/(used in) operating activities 1,661,848 (1,815,384)

Investing activities

Purchases of intangible assets (360,666) (27,010)Purchases of property, plant and equipment (4,019,237) (3,951,009)Purchases of land use rights and leasehold land (153) (186,017)Proceeds from disposal of property, plant and equipment 89,008 81,121Purchases of other non-current assets — (104,407)Decrease/(increase) in restricted cash 10,179 (61,000)Acquisition of subsidiaries, net of cash acquired 22 399,669 —Disposal of Jiaozuo Wanfang, net of cash disposed 23(a) (190,786) —Cash disposed as a part of discontinued operation 6 (345,351) —Investments in joint ventures 8 (68,600) (161,554)Investments in associates 8 (1,180,003) (9,026,225)Investment in available-for-sale investment (5,000) —Investment income on financial products 45,384 —Dividends received — 110,605Purchase of held-to-maturity assets (281,000) (500,000)Payments for settlement of future and option contracts, net (812) (497,752)Loans to related parties (519,106) (200,000)Loans repaid by related party 200,000 —Loan to a third party (166,000) —Advance to an associate — (1,263,476)Deposit for investment projects — (283,415)Assets related government grants received 1,940 8,543Others 40,530 (6,777)

Net cash flows used in investing activities (6,350,004) (16,068,373)

54

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)For the six months ended June 30, 2013


For the six monthsended June 30

2013 2012

Financing activities

Proceeds from issuance of short-term bonds, net of issuance costs 7,980,105 —Proceeds from issuance of medium-term bonds, net of issuance costs 2,971,500 2,000,000Repayments of medium-term notes and short-term bonds (9,500,000) (5,000,000)Drawdown of short-term and long-term loans 40,860,599 45,202,515Loan deposits received/(paid) 365,400 (4,004,878)Loan deposits interest received 2,928 —Repayments of short-term and long-term loans (34,089,254) (22,284,966)Proceeds from government subsidies 25,546 —Loans from non-controlling shareholders — 3,441,818Capital injection from non-controlling shareholders 42,808 5,300Dividends paid by subsidiaries to non-controlling shareholders (43,185) (16,890)Interest paid (2,665,613) (2,202,761)

Net cash flows from financing activities 5,950,834 17,140,138

Net increase/(decrease) in cash and cash equivalents 1,262,678 (743,619)

Net foreign exchange differences 81,461 (39,771)

Cash and cash equivalents at beginning of the period 9,063,593 10,591,306

Cash and cash equivalents at end of the period 10,407,732 9,807,916



2013 INTERIM REPORT

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTSFor the six months ended June 30, 2013


1. GENERAL INFORMATION

Aluminum Corporation of China Limited（中國鋁業股份有限公司）(the “Company”) and its

subsidiaries (together the “Group”) are principally engaged in the manufacture and distribution of

alumina, primary aluminum and aluminum fabrication products. The Group is also engaged in the

development of bauxite related resources, the production, fabrication and distribution of bauxite,

iron ore, carbon and relevant non-ferrous metal products and the trading of non-ferrous metal

products and coal products.

The Company is a joint stock company which was incorporated on September 10, 2001 in the

People’s Republic of China (the “PRC”) with limited liability. The address of its registered office is

No. 62 North Xizhimen Street, Haidian District, Beijing, the PRC.

The Company’s shares have been listed on the Main Board of the Hong Kong Stock Exchange

and the New York Stock Exchange in 2001. The Company also listed its A shares on the Shanghai

Stock Exchange in 2007.

In the opinion of the directors, the ultimate holding company of the Company is Aluminum

Corporation of China（中國鋁業公司）(“Chinalco”), a company incorporated and domiciled in the

PRC and wholly owned by the State-owned Assets Supervision and Administration Commission of

the State Council.

The interim condensed consolidated financial statements are presented in Renminbi (“RMB”)

unless otherwise stated.

The interim condensed consolidated financial statements have not been audited.

56

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)For the six months ended June 30, 2013


2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The interim condensed consolidated financial statements for the six months ended June 30,

2013 have been prepared in accordance with International Accounting Standard (“IAS”) 34

Interim Financial Reporting.

The interim condensed consolidated financial statements do not include all the information

and disclosures required in the annual financial statements, and should be read in

conjunction with the Group’s annual financial statements as at December 31, 2012.

Going concern

As at June 30, 2013, the Group’s current liabilities exceeded its current assets by

approximately RMB30,382 million (December 31, 2012: RMB34,837 million). The directors

of the Company have considered the Group’s available sources of funds as follows:

• The Group’s expected net cash inflows from operating activities in 2013;

• Unutilised banking facilities of approximately RMB92,472 million as at June 30, 2013,

of which amounts totalling RMB76,905 million will be subject to renewal during the

next 12 months. The directors of the Company are confident that these banking

facilities could be renewed upon expiration based on the Group’s past experience and

good credit standing; and

• Other available sources of financing from banks and other financial institutions given

the Group’s credit history.


2013 INTERIM REPORT




(CONTINUED)

(a) Basis of preparation (Continued)

Going concern (Continued)

The directors of the Company believe that the Group has adequate resources to continue

operation for the foreseeable future of not less than 12 months from the approval date

of these financial statements. The directors of the Company therefore are of the opinion

that it is appropriate to adopt the going concern basis in preparing the interim condensed

consolidated financial statements.

Discontinued operation

On June 27, 2013, the Company disposed of all of its equity interests in the following

subsidiaries, including (1) 90.03% equity interest in Chalco Henan Aluminum Co., Ltd.

（中鋁河南鋁業有限公司） (“Henan Aluminum”); (2) 60% equity interest in Chalco

Southwest Aluminum Co., Ltd. （中鋁西南鋁板帶有限公司）; (3) 100% equity interest in

Chalco Southwest Aluminum Cold Rolling Company Ltd. （中鋁西南鋁冷連軋板帶有限

公司）; (4) 56.86% equity interest in Huaxi Aluminum Company Ltd. （華西鋁業有限責

任公司）; (5) 93.30% equity interest in Chalco Ruimin Co., Ltd. （中鋁瑞閩鋁板帶有限公

司）; (6) 100% equity interest in Chalco Qingdao Light Metal Co., Ltd. （中鋁青島輕金屬

有限公司） (“Qingdao Light Metal”) (collectively as “Aluminum Fabrication Subsidiaries”).

Meanwhile, the Company disposed of Northwest Aluminum Fabrication Branch of the

Company (“Aluminum Fabrication Branch”) to Northwest Aluminum Fabrication Plant, a

subsidiary of Chinalco, on June 27, 2013. The above transactions shall be settled in cash. In

addition, as an adherent condition of the transfer of the equity interest in Henan Aluminum

and Qingdao Light Metal, the Company also transferred the entrusted loans due from

Henan Aluminum and Qingdao Light Metal to Chinalco (collectively as “Transferred Loan to

Chinalco”), which were completed on June 27, 2013.

58




(CONTINUED)

(a) Basis of preparation (Continued)

Discontinued operation (Continued)

The above disposed Aluminum Fabrication Subsidiaries and Aluminum Fabrication Branch

form the “Aluminum Fabrication Segment” of the Group. In accordance with IFRS 5 Non-

current Assets Held for Sale and Discontinued Operations, the Aluminum Fabrication

Segment was classified as discontinued operation and the operating results of Aluminum

Fabrication Segment has been presented as discontinued operation in the interim condensed

consolidated statement of comprehensive income for the period ended June 30, 2013. The

comparative figures for the interim condensed consolidated statement of comprehensive

income and related notes are restated to reflect the reclassification between continuing

operations and discontinued operation accordingly.

Details on discontinued operation are disclosed in Note 6 to the interim condensed

consolidated financial statements.


2013 INTERIM REPORT




(CONTINUED)

(b) Significant accounting policies

The accounting policies adopted in the preparation of the interim condensed consolidated

financial statements are consistent with those followed in the preparation of the Group’s

annual financial statements for the year ended December 31, 2012, except the new

accounting policy adopted by the Group in respect of coal mining rights after the acquisition

of Chalco Ningxia Energy Group Co., Ltd. （中鋁寧夏能源集團有限公司） (“Ningxia Energy”)

(formerly named as Ningxia Power Group Co., Ltd. (“Ningxia Power”)（寧夏發電集團有

限公司）) in January 2013 as disclosed in note 22(a) to the financial statements, and the

adoption of new and revised International Financial Reporting Standards (“IFRSs”) (which

include all International Financial Reporting Standards, International Accounting Standards,

and Interpretations and amendments) that are effective from January 1, 2013:

New accounting policy adopted by the Group in relation to Ningxia Energy

Mining rights and mineral exploration rights

The Group’s mining rights include coal, bauxite and other mining rights.

Mining rights are initially recorded at cost which include payments of consideration for

extraction rights, exploration and other direct costs.

Amortisation of bauxite and other mining rights is provided on a straight-line basis according

to the shorter of the expiration date of the mining certificate and the mineable period of

natural resources. Estimated useful lives of the majority of the mining rights range from 3 to

30 years.

60




(CONTINUED)

(b) Significant accounting policies (Continued)

New accounting policy adopted by the Group in relation to Ningxia Energy

(Continued)

Mining rights and mineral exploration rights (Continued)

Coal mining rights are amortised on a unit-of-production basis over the economically

recoverable reserves of the mine concerned.

Mineral exploration rights are initially recorded at the cost of the acquisition and adopt

the same method as the one for the mining rights to amortise since the exploration rights

convert to the mining rights and begin to produce.

New and revised IFRSs adopted by the Group

IAS 1 Presentation of Items of Other Comprehensive Income — Amendments to IAS 1

The amendments to IAS 1 introduce a grouping of items presented in other comprehensive

income (“OCI”). Items that could be reclassified (or “recycled”) to profit or loss at a future

point in time (e.g., net gain on hedge of net investment, exchange differences on translation

of foreign operations, net movement on cash flow hedges and net loss or gain on available-

for-sale financial assets) now have to be presented separately from items that will never

be reclassified (e.g., actuarial gains and losses on defined benefit plans and revaluation of

land and buildings). The amendments affected presentation only and have no impact on the

Group’s financial position or performance.


2013 INTERIM REPORT




(CONTINUED)


New and revised IFRSs adopted by the Group (Continued)

IAS 1 Clarification of the requirement for comparative information (Amendment)

This amendment to IAS 1 clarifies the difference between voluntary additional comparative

information and the minimum required comparative information. An entity must include

comparative information in the related notes to the financial statements when it voluntarily

provides comparative information beyond the minimum required comparative period. The

additional voluntarily comparative information does not need to be presented in a complete

set of financial statements.

An opening statement of financial position (known as the ‘third balance sheet’) must be

presented when an entity applies an accounting policy retrospectively, makes retrospective

restatements, or reclassifies items in its financial statements, provided any of those changes

has a material effect on the statement of financial position at the beginning of the

preceding period. The amendment clarifies that a third balance sheet does not have to be

accompanied by comparative information in the related notes. Under IAS 34, the minimum

items required for interim condensed financial statements do not include a third balance

sheet. The amendment has no impact on the Group.

62




(CONTINUED)



IAS 19 Employee Benefits (Revised)

The IASB has issued numerous amendments to IAS 19. The revised standard introduces

significant changes in the accounting for defined benefit pension plans including removing

the choice to defer the recognition of actuarial gains and losses. Other changes include

modifications to the timing of recognition for termination benefits and disclosures of

defined benefit plans. These amendments have no impact on the Group’s financial position

or performance.

IAS 28 Investments in Associates and Joint Ventures (as revised in 2011)

As a consequence of the new IFRS 11 Joint Arrangements, and IFRS 12 Disclosure of

Interests in Other Entities, IAS 28 Investments in Associates, has been renamed IAS 28

Investments in Associates and Joint Ventures, and describes the application of the equity

method to investments in joint ventures in addition to associates. These amendments have

no impact on the Group’s financial position or performance.


2013 INTERIM REPORT




(CONTINUED)



IFRS 1 Government Loans — Amendments to IFRS 1

These amendments require first-time adopters to apply the requirements of IAS 20

Accounting for Government Grants and Disclosure of Government Assistance, prospectively

to government loans existing at the date of transition to IFRSs. Entities may choose to

apply the requirements of IFRS 9 (or IAS 39, as applicable) and IAS 20 to government

loans retrospectively if the information needed to do so had been obtained at the time of

initially accounting for that loan. The exception would give first-time adopters relief from

retrospective measurement of government loans with a below-market rate of interest. The

amendments have no impact on the Group.

IFRS 7 Disclosures — Offsetting Financial Assets and Financial Liabilities — Amendments to IFRS 7

The amendments require an entity to disclose information about rights to set-off financial

instruments and related arrangements (e.g., collateral agreements). The disclosures would

provide users with information that is useful in evaluating the effect of netting arrangements

on an entity’s financial position. The new disclosures are required for all recognised financial

instruments that are set off in accordance with IAS 32 Financial Instruments: Presentation.

The disclosures also apply to recognised financial instruments that are subject to an

enforceable master netting arrangement or similar agreement, irrespective of whether the

financial instruments are set off in accordance with IAS 32. As the Group is not setting

off financial instruments in accordance with IAS 32 and does not have relevant offsetting

arrangements, the amendments do not have any impact on the Group.

64




(CONTINUED)



IFRS 10 Consolidated Financial Statements and IAS 27 Separate Financial Statements

IFRS 10 establishes a single control model that applies to all entities including special

purpose entities. IFRS 10 replaces the parts of previously existing IAS 27 Consolidated and

Separate Financial Statements that dealt with consolidated financial statements and SIC 12

Consolidation — Special Purpose Entities.

IFRS 10 changes the definition of control such that an investor controls an investee when

it is exposed, or has rights, to variable returns from its involvement with the investee and

has the ability to affect those returns through its power over the investee. To meet the

definition of control in IFRS 10, all three criteria must be met, including: (a) an investor has

power over an investee; (b) the investor has exposure, or rights, to variable returns from its

involvement with the investee; and (c) the investor has the ability to use its power over

the investee to affect the amount of the investor’s returns. IFRS 10 has no impact on the

consolidation of investments held by the Group.


2013 INTERIM REPORT




(CONTINUED)



IFRS 11 Joint Arrangements

IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC 13 Jointly Controlled Entities

— Non-Monetary Contributions by Venturers. IFRS 11 addresses only two forms of joint

arrangements, i.e., joint operations and joint ventures, and removes the option to account

for joint ventures using proportionate consolidation. Instead, joint arrangements that meet

the definition of a joint venture must be accounted for using the equity method. Application

of this new standard has no impact on the financial position and financial performance of

the Group because there are no changes in classification of the Group’s joint arrangements

after the Group assessed its investments in joint ventures and the Group’s joint ventures are

accounted for using equity method of accounting.

IFRS 12 Disclosure of Interests in Other Entities

IFRS 12 includes all of the disclosures that were previously in IAS 27 related to consolidated

financial statements, as well as all of the disclosures that were previously included in

IAS 31 and IAS 28. These disclosures relate to an entity’s interests in subsidiaries, joint

arrangements, associates and structured entities. None of these disclosure requirements are

applicable for interim condensed consolidated financial statements, unless significant events

and transactions in the interim period require that they are provided. Accordingly, the Group

has not made such disclosures.

66




(CONTINUED)



IFRS 13 Fair Value Measurement

IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements.

IFRS 13 does not change when an entity is required to use fair value, but rather provides

guidance on how to measure fair value under IFRS when fair value is required or permitted.

The application of IFRS 13 has not materially impacted the fair value measurements carried

out by the Group.

IFRS 13 also requires specific disclosures on fair values, some of which replace existing

disclosure requirements in other standards, including IFRS 7 Financial Instruments:

Disclosures. Some of these disclosures are specifically required for financial instruments by

IAS 34.16A(j), thereby affecting the interim condensed consolidated financial statements

period. The Group provides these disclosures in Note 4.

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

This interpretation applies to waste removal (stripping) costs incurred in surface mining

activity during the production phase of the mine. The interpretation addresses the initial

measurement and subsequent measurement of the benefit from the stripping activity.

According to the Group’s assessment, this standard has no material impact on the financial

position and performance of the Group.


2013 INTERIM REPORT




(CONTINUED)



Annual Improvements May 2012

These amendments have no impact on the Group, but include:

IFRS 1 First-time Adoption of International Financial Reporting Standards

This amendment clarifies that an entity that ceased applying IFRS in the past and chooses,

or is required, to apply IFRS, has the option to re-apply IFRS 1. If IFRS 1 is not re-applied, an

entity must retrospectively restate its financial statements as if it had never ceased applying

IFRS.

IAS 16 Property, Plant and Equipment

This amendment clarifies that major spare parts and servicing equipment that meet the

definition of property, plant and equipment are not inventories.

68




(CONTINUED)



IAS 32 Financial Instruments: Presentation

This amendment clarifies that income taxes arising from distributions to equity holders are

accounted for in accordance with IAS 12 Income Taxes. The amendment removes existing

income tax requirements from IAS 32 and requires entities to apply the requirements in IAS

12 to any income tax arising from distributions to equity holders. The amendment does not

have any impact on the interim condensed consolidated financial statements for the Group,

as there is no tax consequences attached to cash or non-cash distribution.

IAS 34 Interim Financial Reporting

The amendment clarifies the requirements in IAS 34 relating to segment information for

total assets and liabilities for each reportable segment to enhance consistency with the

requirements in IFRS 8 Operating Segments. Total assets and liabilities for a reportable

segment need to be disclosed only when the amounts are regularly provided to the chief

operating decision maker and there has been a material change in the total amount

disclosed in the entity’s previous annual consolidated financial statements for that reportable

segment. As the Group included the disclosure of total segment assets and liabilities as

reported to the chief operating decision maker in prior year’s financial statements, the

amendment does not have any impact on the interim condensed consolidated financial

statements.

The Group has not early adopted any other standard, interpretation or amendment that has

been issued but is not yet effective.


2013 INTERIM REPORT



3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of the interim condensed consolidated financial statements requires management

to make judgements, estimates and assumptions that affect the reported amounts of revenues,

expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent

liabilities. Uncertainty about these judgements, assumptions and estimates could result in outcomes

that require a material adjustment to the carrying amounts of assets or liabilities affected in future

periods.

In preparing these interim condensed consolidated financial statements, the significant judgements

and estimates made by management in applying the Group’s accounting policies and the key

sources of estimation uncertainty were the same as those that applied to the consolidated financial

statements for the year ended December 31, 2012, except the new estimates adopted by the

Group after the acquisition of Ningxia Energy in January 2013 as disclosed in note 22(a) to the

financial statements:

Coal reserve estimates and unit-of-production amortisation for coal mining

rights

Engineering estimates of the Group’s coal reserves are inherently imprecise and represent

only approximate amounts because of the subjective judgements involved in developing such

information. There are authoritative guidelines regarding the engineering criteria that have to be

met before estimated coal reserves can be designated as “proved” and “probable”. Proved and

probable coal reserve estimates are updated on regular basis and have taken into account recent

production and technical information about each mine. In addition, as prices and cost levels

change from year to year, the estimate of proved and probable coal reserves also changes.

70



4. FINANCIAL RISK MANAGEMENT

4.1 Financial risk management

(a) Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risk (including

foreign currency risk, cash flow and fair value interest rate risk and commodity price

risk), credit risk and liquidity risk.

The interim condensed consolidated financial statements do not include all financial

risk management information and disclosures required in the annual financial

statements, and should be read in conjunction with the Group’s annual financial

statements for the year ended December 31, 2012.

There have been no changes in the risk management department or in any risk

management policies since last year end. Compared to last year end, there was no

material change in the status of market risk and credit risk.


2013 INTERIM REPORT



4. FINANCIAL RISK MANAGEMENT (CONTINUED)

4.1 Financial risk management (Continued)

(b) Liquidity risk

Compared to December 31, 2012, there was no material change in the contractual

undiscounted cash outflows for financial liabilities, except for the net increase

in short-term loans and borrowings amounting to RMB5,671 million which were

primarily for meeting working capital need; and the addition and the repayment

of long-term bank and other loans amounting to RMB2,752 million and RMB4,879

million, respectively.

As at June 30, 2013, the Group had total banking facilities of approximately

RMB158,552 million (December 31, 2012: RMB161,761 million), of which amounts

totalling RMB66,080 million have been utilised as at June 30, 2013 (December 31,

2012: RMB64,819 million). Banking facilities of approximately RMB106,610 million

will be subject to renewal within the next 12 months. The directors of the Company

are confident that such banking facilities can be renewed upon expiration based on

their past experience and good credit standing.

In addition, as at June 30, 2013, the Group had credit facilities through its primary

aluminum futures agent at the London Metal Exchange amounting to USD116 million

(equivalent to RMB716.73 million) (December 31, 2012: USD94 million (equivalent to

RMB590.84 million)), of which USD24.49 million (equivalent to RMB151.32 million)

(December 31, 2012: USD1.03 million (equivalent to RMB6.47 million)) has been

utilised. The futures agent has the right to adjust the related credit facilities.

72




4.2 Financial instruments

Fair values

Set out below is the carrying amounts and fair values of financial instruments as at June 30,

2013:

Carrying

amount Fair value

Financial assets

Current

Trade and notes receivables 6,907,215 6,907,215

Financial assets at fair value

through profit or loss 343 343

Restricted cash and time deposits 542,978 542,978

Cash and cash equivalents 10,407,732 10,407,732

Financial assets included in other current assets 10,080,073 10,080,073

Subtotal 27,938,341 27,938,341

Non-current

Available-for-sale financial investments 92,652 92,652

Financial assets included in non-current assets 4,734,688 4,734,688

Subtotal 4,827,340 4,827,340

Total 32,765,681 32,765,681


2013 INTERIM REPORT




4.2 Financial instruments (Continued)

Fair values (Continued)

Carrying

amount Fair value

Financial liabilities

Current

Financial liabilities at fair value through profit or loss (12,493) (12,493)

Interest-bearing loans and borrowings (70,887,958) (70,887,958)

Current portion of long-term payables (8,330) (8,330)

Current portion of bond issuance cost payable (6,000) (6,000)

Interest payables for borrowings (973,960) (973,960)

Financial liabilities included in other payables

and accrued expenses (5,407,815) (5,407,815)

Trade and notes payables (13,635,588) (13,635,588)

Subtotal (90,932,144) (90,932,144)

Non-current

Bond issuance cost payable (6,000) (6,000)

Financial liabilities included in non-current liabilities (1,639,278) (1,639,278)

Interest-bearing loans and borrowings (50,937,727) (49,601,847)

Subtotal (52,583,005) (51,247,125)

Total (143,515,149) (142,179,269)

74





Fair value hierarchy

The Group uses the following hierarchy for determining and disclosing the fair values of

financial instruments:

Level 1: Fair value measured based on quoted (unadjusted) prices in active markets for

identical assets or liabilities.

Level 2: Fair value measured based on valuation techniques for which all inputs which

have a significant effect on the recorded fair value are observable, either

directly or indirectly.

Level 3: Fair value measured based on valuation techniques for which any inputs which

have a significant effect on the recorded fair value are not based on observable

market data.

For financial instruments that are recognised at fair value on a recurring basis, the Group

determines whether transfers have occurred between levels in the hierarchy by re-assessing

the categorisation (based on the lowest level input that is significant to the fair value

measurement as a whole) at the end of each reporting period.


2013 INTERIM REPORT





Fair value hierarchy (Continued)

As at June 30, 2013, the Group held the following classes of financial instruments measured

at fair value:

Financial assets at fair value through profit or loss:

Level 1 Level 2 Level 3 Total

Futures contracts 343 — — 343Forward foreign exchange contracts — — — —

343 — — 343

Financial liabilities at fair value through profit or loss:

Level 1 Level 2 Level 3 Total

Futures contracts 865 — — 865Options contracts — 11,628 — 11,628

865 11,628 — 12,493

During the six-month period ended June 30, 2013, there were no transfers between Level

1 and Level 2 fair value measurements, and no transfers into or out of Level 3 fair value

measurements.

76



5. REVENUE AND SEGMENT INFORMATION

(a) Revenue

Revenue from continuing operations recognised during the period is as follows:

For the six months

ended June 30

2013 2012

(Restated)

Sales of goods (net of value-added tax) 70,407,058 65,878,247

Other revenue 706,155 891,149

71,113,213 66,769,396

Other revenue primarily includes revenue from the sale of scrap and other materials, the

supply of gas, heat and water and the provision of machinery processing, transportation,

packing and other services.


2013 INTERIM REPORT



5. REVENUE AND SEGMENT INFORMATION (CONTINUED)

(b) Segment information

The presidents of the Company (formerly “the Company’s Executive Committee”) have

been identified as the chief operating decision-makers. They are responsible for the review

of the internal reports in order to allocate resources to operating segments and assess their

performance.

The presidents consider the business from a product perspective comprising alumina,

primary aluminum and aluminum fabrication for the Group’s manufacturing business, which

is identified as separate reportable operating segments. In addition, the Group’s trading

business is identified as a separate reportable operating segment. The Group’s operating

segments also include corporate and other operating activities.

However, as disclosed in notes 2(a) and 6 to the financial statements, the Group has

disposed of its equity interests and assets in the Aluminum Fabrication Segment on June 27,

2013. Accordingly, the Aluminum Fabrication Segment has been classified as a discontinued

operation and was excluded from the segment information for the period ended June 30,

2013.

In addition, the Company acquired an aggregate of 70.82% equity interest in Ningxia

Energy on January 23, 2013. Ningxia Energy is principally engaged in research and

development, production and operation of energy products, mainly includes coal mining,

electricity generation by thermal power, wind power and solar power, new energy related

equipment manufacturing business, and construction and operation of coal aluminum

integration. After the acquisition of Ningxia Energy, the presidents have identified Ningxia

Energy and other energy related operations, formerly included in corporate and other

operating segments, as energy segment in accordance with IFRS 8 Operating Segments.

78




(b) Segment information (Continued)

As a result of the above changes in segment structure, the comparative figures of segment

information for the period ended 30 June, 2012 were restated accordingly.

The presidents assess the performance of operating segments based on profit or loss

before income tax in related periods. Unless otherwise stated below, the manner of

assessment used by the presidents is consistent with that applied in these interim condensed

consolidated financial statements. Management has determined the operating segments

based on the reports reviewed by the presidents that are used to make strategic decisions.

The Group’s five reportable operating segments are summarised as follows:

• The alumina segment, which consists of mining and purchasing bauxite and other

raw materials, refining bauxite into alumina, and selling alumina both internally to

the Group’s aluminum plants and externally to customers outside the Group. This

segment also includes the production and sale of chemical alumina and metal gallium.

• The primary aluminum segment, which consists of procuring alumina and other raw

materials, supplemental materials and electricity power, smelting alumina to produce

primary aluminum which is sold to the Group’s internal aluminum fabrication plants

and external customers. This segment also includes the production and sale of carbon

products and aluminum alloy and other aluminum products.


2013 INTERIM REPORT





• The energy segment, which consists of research and development, production and

operation of energy products, mainly includes coal mining, electricity generation

by thermal power, wind power and solar power, new energy related equipment

manufacturing business, and construction and operation of coal aluminum integration.

Sales of coals are mainly to the Group’s internal and external coal consuming

customers, electricity used within the Group and by regional power grid corporations.

• The trading segment, which engages in the trading of alumina, primary aluminum,

aluminum fabrication products, other non-ferrous metal products, coal products

and raw materials and supplemental materials to internal manufacturing plants and

external customers in the PRC. The products are sourced from fellow subsidiaries and

international and domestic suppliers of the Group. Sales of products manufactured by

the Group’s manufacturing business are included in the total revenue of the trading

segment and are eliminated with the segment revenue of the respective segments

which supplied the products to the trading segment.

• Corporate and other operating segments, which mainly include management of

corporate, research and development activities and others.

Prepaid current income tax and deferred tax assets are excluded from segment assets, and

income tax payable and deferred tax liabilities are excluded from segment liabilities. All sales

among the operating segments were conducted on terms mutually agreed among group

companies, and have been eliminated upon consolidation.

80





For the six months ended June 30, 2013

AluminaPrimary

aluminum Energy Trading

Corporateand otheroperatingactivities

Inter- segment

elimination Total

Total revenue 15,811,153 26,045,781 1,967,329 58,053,517 306,159 (31,034,097) 71,149,842Inter-segment revenue (14,657,799) (10,397,304) (148,357) (5,775,096) (55,541) 31,034,097 —

Sales of self-produced products 17,195,667

Sales of products sourced from external suppliers 35,082,754

Revenue from external customers from continuing operations 1,153,354 15,648,477 1,818,972 52,278,421 250,618 — 71,149,842

Elimination with discontinued operation (36,629)

Revenue from external customers 71,113,213

Segment (loss)/profit from continuing operations (576,647) (985,977) 158,618 285,944 425,764 (194,823) (887,121)

Income tax benefit from continuing operations 33,650

Loss for the period from continuing operations (853,471)


2013 INTERIM REPORT






Alumina

Primary


Corporate

and other

operating

activities

Inter-

segment

elimination Total

Other items for continuing

operations:

Finance income 12,194 34,818 40,804 49,197 23,519 — 160,532

Finance costs (537,852) (737,970) (448,040) (103,159) (939,305) — (2,766,326)

Share of profits/(losses) of

joint ventures — — 77,408 — (32,594) — 44,814

Share of profits of associates — 71,114 148,645 — 27,722 — 247,481

Amortisation of land use

rights and leasehold land (18,917) (13,273) (6,268) (523) (672) — (39,653)

Depreciation and

amortisation excluding

the amortisation of land

use rights and leasehold land (1,521,341) (1,374,961) (426,631) (3,142) (55,175) — (3,381,250)

Gain/(loss) on disposal of

property, plant and equipment 26,277 74,509 (152) — (6) — 100,628

Gain on disposal of alumina

production line of Guizhou

branch of the Company 33,247 — — — — — 33,247

Change for impairment of

inventories 114,411 192,857 (180,002) (73,217) — — 54,049

Reversal of impairment of

receivables, net of bad debts

recovered 2,393 735 4,024 — — — 7,152

82






Alumina

Primary


Corporate

and other

operating

activities

Inter-

segment

elimination Total

Additions to non-current

assets during the period

from continuing operations

Intangible assets 390,302 — 6,199,781 — 346 — 6,590,429

Land use rights — 149 618,195 — — — 618,344

Property, plant and equipment 1,835,710 1,504,103 21,153,351 2,240 54,686 — 24,550,090



from discontinued operation

Discontinued

operation

Intangible assets —

Land use rights 1,212

Property, plant and equipment 134,128


2013 INTERIM REPORT





For the six months ended June 30, 2012 (Restated)

AluminaPrimary


Corporate and other operating activities

Inter-segment

elimination Total

Total revenue 15,895,336 28,259,293 — 56,891,724 322,396 (34,367,996) 67,000,753Inter-segment revenue (14,550,712) (12,733,667) — (6,929,272) (154,345) 34,367,996 —

Sales of self-produced products 19,463,206

Sales of products sourced from external suppliers 30,499,246

Revenue from external customers from continuing operations 1,344,624 15,525,626 — 49,962,452 168,051 — 67,000,753

Elimination with discontinued operation (231,357)

Revenue from external customers 66,769,396

Segment (loss)/profit from continuing operations (1,560,178) (1,216,186) (10,479) 274,045 (1,103,123) (25,001) (3,640,922)

Income tax benefit from continuing operations 724,717

Loss for the period from continuing operations (2,916,205)

84






Alumina

Primary


Corporate

and other

operating

activities

Inter-

segment

elimination Total

Other items for continuing

operations:

Finance income 8,707 21,601 2,746 50,948 27,727 — 111,729

Finance costs (438,156) (747,159) — (126,176) (840,219) — (2,151,710)

Share of profits of

joint ventures — — — — 12,500 — 12,500

Share of profits/(losses)

of associates — 136,623 (792) — 7,871 — 143,702

Amortisation of land use

rights and leasehold land (12,622) (21,552) — (8) (2,006) — (36,188)

Depreciation and amortisation

excluding the amortisation

of land use rights and

leasehold land (1,521,640) (1,387,692) (124) (1,944) (62,106) — (2,973,506)

(Loss)/gain on disposal of

property, plant and equipment (250) 3,421 — (255) (38) — 2,878

Change for impairment of

inventories (228,319) (86,170) — (6,305) (97) — (320,891)

(Provision for)/reversal

of impairment of receivables,

net of bad debts recovered (776) 559 — — (809) — (1,026)


2013 INTERIM REPORT






Alumina

Primary


Corporate

and other

operating

activities

Inter-

segment

elimination Total



from continuing operations

Intangible assets 25,931 — 8 — 887 — 26,826

Land use rights 50,381 122,974 — — — — 173,355

Property, plant and equipment 1,997,743 1,741,506 4,088 46,591 65,671 — 3,855,599



from discontinued operation

Discontinued

operation

Intangible assets 184


Property, plant and equipment 211,447

86





Alumina

Primary


Corporate

and other

operating

activities

Inter-

segment

elimination Total

As at June 30, 2013

Segment assets 75,275,893 51,628,488 36,019,823 20,096,349 25,038,277 (7,886,825) 200,172,005

Unallocated:

Deferred tax assets 2,049,018

Prepaid income tax 267,073

Total assets 202,488,096

Segment liabilities 41,497,843 27,582,958 22,844,954 17,059,305 44,291,815 (6,312,308) 146,964,567

Unallocated:

Deferred tax liabilities 1,115,215

Income tax payable 84,447

Total liabilities 148,164,229


2013 INTERIM REPORT





Alumina

Primary


Corporate

and other

operating

activities

Inter-

segment

elimination Total

As at December

31, 2012 (Restated)

Segment assets 73,674,402 56,052,801 2,532,851 14,170,929 20,934,520 (9,198,192) 158,167,311

Unallocated:

Deferred tax assets 2,116,986

Prepaid income tax 295,434

Discontinued operation 14,437,151

Total assets 175,016,882

Segment liabilities 40,217,727 30,396,514 865,566 11,361,833 37,567,564 (9,863,984) 110,545,220

Unallocated:

Income tax payable 61,059

Discontinued operation 10,639,453

Total liabilities 121,245,732

88





The Group mainly operates in the Mainland China. Geographical information on operating

segments is as follows:

For the six months

ended June 30

2013 2012

(Restated)

Segment revenue from external

customers from continuing operations

— Domestic 69,633,303 65,043,189

— Overseas 1,479,910 1,726,207

71,113,213 66,769,396

June 30,

2013

December 31,

2012

(Audited)

Non-current assets (excluding available-for-

sale financial investments, entrusted loans

and deferred tax assets)

— Domestic 122,801,123 111,725,252

— Overseas 14,258,189 11,894,128

137,059,312 123,619,380


2013 INTERIM REPORT





For the six months ended June 30, 2013, revenues from continuing operations of

approximately RMB9,509 million (for the six months ended June 30, 2012 from continuing

operations: RMB11,997 million (restated)) are derived from entities directly or indirectly

owned or controlled by the PRC government, including Chinalco. These revenues are mainly

attributable to the alumina, primary aluminum, energy and trading segments. There is no

other individual customer with transactions of more than 10% of the Group’s revenue

during the period ended June 30, 2013.

6. DISCONTINUED OPERATION

On June 9, 2013, the Company entered into an equity interest transfer agreement (“Aluminum

Fabrication Interests Transfer Agreement”) with Chinalco, pursuant to which the Company

transferred to Chinalco its equity interests in (a) six subsidiaries: (1) 90.03% equity interest in

Chalco Henan Aluminum Co., Ltd.(中鋁河南鋁業有限公司) (“Henan Aluminum”); (2) 60% equity

interest in Chalco Southwest Aluminum Co., Ltd.(中鋁西南鋁板帶有限公司); (3) 100% equity

interest in Chalco Southwest Aluminum Cold Rolling Company Ltd.(中鋁西南鋁冷連軋板帶有

限公司); (4) 56.86% equity interest in Huaxi Aluminum Company Ltd.(華西鋁業有限責任公司);

(5) 93.30% equity interest in Chalco Ruimin Co., Ltd.(中鋁瑞閩鋁板帶有限公司); and (6) 100%

equity interest in Chalco Qingdao Light Metal Co., Ltd.(中鋁青島輕金屬有限公司) (“Qingdao Light

Metal”) (collectively known as “Aluminum Fabrication Subsidiaries”), (b) a joint venture: 50% equity

interest in Chalco Sapa Aluminum Products (Chongqing) Co., Ltd. (中鋁薩帕特種鋁材(重慶)有限公司)

(“Chalco Sapa”); and (c) an associate: 40% equity interest in Guizhou Chalco Aluminum Co., Ltd. (貴

州中鋁鋁業有限公司) (“Guizhou Chalco”) ((b) and (c) together known as “Aluminum Fabrication

Investments”) (see Note 8(d)). In addition, the Company entered into the Aluminum Fabrication

Assets Transfer Agreement with Northwest Aluminum Fabrication Plant, a subsidiary of Chinalco, on

June 6, 2013, pursuant to which the Company transferred the net assets in Northwest Aluminum

Fabrication Branch of the Company (西北鋁加工分公司) (“Aluminum Fabrication Branch”) to

Northwest Aluminum Fabrication Plant. The above transactions were completed on June 27, 2013.

90



6. DISCONTINUED OPERATION (CONTINUED)

The Aluminum Fabrication Subsidiaries and Aluminum Fabrication Branch form the Aluminum

Fabrication Segment of the Group. Pursuant to the Aluminum Fabrication Interests Transfer Agreement

and the Aluminum Fabrication Assets Transfer Agreement, the consideration thereof was determined

with reference to independent valuation undertaken by professional valuers recognised in the PRC of

the net asset of the respective entities/branch as at December 31, 2012, adjusted to give effect to the

changes in net assets value from the valuation date (December 31, 2012) to the disposal date.

As an adhere condition to disposal of certain of the Aluminum Fabrication Subsidiaries, as at December

31, 2012, the Company’s entrusted loans to Henan Aluminum and Qingdao Light Metal were

transferred to Chinalco with a nominal principal amount up to RMB3 billion (“Transferred Loan to

Chinalco”), and the appraisal value of such loans was taken as the basis for the consideration.

After giving adjustment to the change in the net assets value from the valuation date (December

31, 2012) to the disposal date regarding the Aluminum Fabrication Subsidiaries and the Aluminum

Fabrication Branch, the aggregate consideration for the disposal of the Aluminum Fabrication Segment

and the Transferred Loan to Chinalco was finalized at RMB6,314.5 million. The disposal of the Aluminum

Fabrication Segment and the Transferred Loan to Chinalco shall be considered in their totality.

The disposal of Aluminum Fabrication Segment can optimise the asset structure, lower the debt to

asset ratio, improve the debt portfolio of the Group, increase the operating cash flows of the Group

and strengthen the re-financing ability of the Group, which is beneficial for the Group to focus on the

development of quality resources and develop its business relating to the quality resources, so as to move

towards the forefront of the industry chain and the high-end of the value chain.

Since the Aluminum Fabrication Segment was a component of the Group’s business, representing a

separate major line of business with separately identifiable operations and cash flows, it is classified

as a discontinued operation. Accordingly, the results of the Aluminum Fabrication Segment were

separately reported as a “discontinued operation” in the interim condensed consolidated statement of

comprehensive income for the period ended June 30, 2013. In addition, the gain recognised on the

disposal of the Aluminum Fabrication Segment was also included in results of discontinued operation.


2013 INTERIM REPORT




The details of the net assets of discontinued operation disposed of as at June 27, 2013 are as

follows:

Note June 27, 2013

Net assets disposed of:

Cash and cash equivalents 345,351

Trade and notes receivables 1,563,462

Inventories 2,254,990

Other current assets 1,427,870

Deferred tax assets 105,716

Property, plant and equipment 7 9,354,169


Intangible assets 7 11,210

Investment in an associate 202,210

Other non-current assets 39,472

Trade and notes payables (2,016,152)

Income tax payable (583)

Other payables and accrued expenses (598,000)

Interest-bearing loans and borrowings (9,808,339)

Other non-current liabilities (55,435)

Net assets 3,093,045

Non-controlling interests (324,539)

Net assets disposed of 2,768,506

Transferred Loan to Chinalco 2,925,500

92




The details of the net assets of discontinued operation disposed of as at June 27, 2013 are as

follows: (Continued)

June 27, 2013

Total net assets disposed of 5,694,006

Gain on disposal of discontinued operation and

Transferred Loan to Chinalco 620,494

6,314,500

Satisfied by:

Cash —

Receivable 6,314,500

6,314,500

An analysis of the cash flows of cash and cash equivalents in respect of disposal of discontinued

operation is as follows:

June 27, 2013

Cash consideration —

Less: cash and cash equivalents disposed of (345,351)

Net cash outflows on disposal of discontinued operation (345,351)


2013 INTERIM REPORT




The results of discontinued operation are presented below:

For the six months

ended June 30

2013* 2012

Revenue 5,527,808 4,928,385

Expenses (5,684,116) (5,256,249)

Operating loss (156,308) (327,864)

Finance costs, net (259,187) (212,273)

Share of profit/(loss) of an associate 877 (292)

Loss before tax from discontinued operation (414,618) (540,429)

Income tax benefit 1,268 31,866

Loss for the period from discontinued operation (413,350) (508,563)

Gain on disposal of discontinued operation 620,494 —

Profit/(loss) for the period

from discontinued operation 207,144 (508,563)

94




The net cash flows incurred by discontinued operation are as follows:

For the six months

ended June 30

2013* 2012

Operating activities (10,253) 142,350

Investing activities (134,499) (140,685)

Financing activities 117,868 (218,196)

Net foreign Exchange differences 124 602

Net cash outflows (26,760) (215,929)

* These numbers represent the activities in current period prior to disposal of discontinued operation on June 27,

2013.


2013 INTERIM REPORT




For the six months

ended June 30

2013 2012

Basic and diluted earning/(loss) per share from

discontinued operation (in RMB per share) 0.02 (0.03)

The calculations of basic and diluted earning/(loss) per share from discontinued operation are

based on:

For the six months

ended June 30

2013 2012

Profit/(loss) attributable to owners of the parent from

discontinued operation (in RMB) 235,913,000 (463,250,000)

Weighted average number of ordinary shares in issue

during the period used in the basic and diluted

earnings or loss per share calculation (note 18) 13,524,487,892 13,524,487,892

96



7. INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT

Intangible assets

Goodwill

Mining

rights

Mineral

exploration

rights

Computer

software

and others Total

Property,

plant and

equipment

Net book amount as

at January 1, 2013 2,362,735 830,650 951,329 115,304 4,260,018 96,248,091

Additions — 19,564 340,633 5,573 365,770 4,606,306

Acquisition of

subsidiaries (note 22) 29,939 6,072,692 — 122,028 6,224,659 20,077,912

Disposals — (434) — (1,366) (1,800) (330,722)

Disposal of discontinued

operation (note 6) — — — (11,210) (11,210) (9,354,169)

Deemed disposal of

Jiaozuo Wanfang

(note 23(a)) (31,790) — — (3,384) (35,174) (3,711,206)

Disposal of Alumina

Production Line of

Guizhou Branch of the

Company (note 23(b)) — — — — — (3,993,895)

Amortisation

and depreciation — (105,527) — (13,107) (118,634) (3,563,983)

Reclassification — 6,571 (6,571) — — —

Currency translation

differences (112) — (3,226) — (3,338) (2,565)

Net book amount as at

June 30, 2013 2,360,772 6,823,516 1,282,165 213,838 10,680,291 99,975,769


2013 INTERIM REPORT



7. INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT

(CONTINUED)

Intangible assets

Goodwill

Mining

rights

Mineral

exploration

rights

Computer

software

and others Total

Property,

plant and

equipment

Net book amount

as at January 1, 2012 2,362,735 568,006 1,081,427 136,602 4,148,770 93,775,373

Additions — 19,478 6,596 936 27,010 4,067,046

Disposals — (220) (1,188) — (1,408) (284,110)

Amortisation

and depreciation — (27,570) — (13,498) (41,068) (3,063,785)

Reclassification — 24,279 (24,279) — — —

Transfer-out to

land use rights — — — — — (44,961)

Currency

translation differences — — — — — 304

Net book amount

as at June 30, 2012 2,362,735 583,973 1,062,556 124,040 4,133,304 94,449,867

98



8. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES

Movements in investments in joint ventures and associates are as follows:

Joint Ventures Associates

As at January 1, 2013 1,936,950 17,211,965

Addition through acquisition of a subsidiary (note (a)) 217,172 963,605

Capital injection (note (b)) 68,600 743,088

Transferred as a subsidiary through business

combination (note (c)) — (2,547,579)

Disposal of investments in a joint venture and

two associates (note (d)) (127,220) (340,955)

Deemed disposal of Jiaozuo Wanfang (note (e)) — 1,157,129

Derecognised investments in a joint venture

and two associates of Jiaozuo Wanfang (note (f)) (4,500) (1,469,145)

Share of profits for the period from:

Continuing operations 44,814 247,481

Discontinued operation — 877

Share of change in reserves — 14,779

Exchange differences — (232,470)

As at June 30, 2013 2,135,816 15,748,775


2013 INTERIM REPORT



8. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES (CONTINUED)

Notes:

(a) Addition through acquisition of a subsidiary

Joint ventures

As disclosed in note 22, Ningxia Energy became the subsidiary of the Company on January 23, 2013. Therefore, the

joint ventures of Ningxia Energy, including Ningxia Zhong Ning Power Co., Ltd. （寧夏中寧發電有限公司）, Ningxia

Da Tang International Dam Power Co., Ltd. （寧夏大唐國際大壩發電有限公司） and Ningxia Tian Jing Shen Zhou

Wind Power Co., Ltd. （寧夏天淨神州風力發電有限公司） became the joint ventures of the Group accordingly.

Associates

As disclosed in note 22, Ningxia Energy became the subsidiary of the Company on January 23, 2013. Therefore,

the associates of Ningxia Energy, including Hua Neng Ningxia Energy Co., Ltd. （華能寧夏能源有限公司）, Hua Dian

Ningxia Ling Wu Power Co., Ltd. （華電寧夏靈武發電有限公司）(“Ling Wu Power”) and Ningxia Jing Neng Ning

Dong Power Co., Ltd. （寧夏京能寧東發電有限責任公司） became the associates of the Group accordingly.

(b) Capital injection

Joint venture

In February 2013, the Company, through a wholly-owned subsidiary, Shanxi Huayu Energy Co., Ltd. （山西華禹能

源有限公司）, and Huozhou Coal Electricity Group Co., Ltd., （霍州煤電集團有限公司） jointly established Huozhou

Coal Group Xuehugou Coal Co., Ltd. （霍州煤電集團河津薛虎溝煤業有限公司） (“Huozhou Coal”). As at June

30, 2013, the Group has injected cash amounting to RMB68.6 million as capital contribution and held 49% equity

interest in Huozhou Coal.

100




Notes: (Continued)

(b) Capital injection (Continued)

Associates

The Company, through a 51% owned subsidiary, Shanxi Huasheng Aluminum Co., Ltd. (山西華盛鋁業有限公司), held 43.03% equity interest in Huozhou Coal Group Xingshengyuan Coal Co., Ltd. (霍州煤電集團興盛園煤業有限責任公司) (“Xingshengyuan Coal”), which was acquired from a third party (the “seller”) at consideration of RMB380 million. The Group paid the prepayment of RMB342 million in 2012. Upon fulfilling the investment conditions as agreed with the seller, the Group transferred the prepayment of RMB342 million and recognized the remaining payable of RMB38 million, totaling RMB380 million, as investment cost of associate in May 2013. As at June 30, 2013, the Group has yet settled the remaining consideration of RMB38 million. In addition, according to the investment agreement entered between the Group and the seller, the Group is required to pay an amount of RMB50 million in addition to aforementioned purchase consideration of RMB380 million if Xingshegnyuan Coal can expand the development of coal mine as agreed in the coming future.

In April 2013, the Company, through a 70.82% owned subsidiary, Ningxia Energy, made additional capital injection to Ling Wu Power of RMB240 million in cash in proportion to its 24.79% equity interest in Ling Wu Power.

In May 2013, the Company, through a 65% owned subsidiary, Chalco Iron Ore Holding Ltd., made additional capital injection to Simfer Jersey Limited of USD18.6 million (equivalent of RMB115 million) in cash in proportion to its 30.55% equity interest in Simfer Jersey Limited.

In February 2013, the Company, through a wholly-owned subsidiary, China Aluminum International Trading Co., Ltd. (中鋁國際貿易有限公司) (“Chalco International Trading”), set up Chalco Jinpingguo Foshan Investment Co., Ltd. (中鋁金平果佛山投資有限公司) (“Jinpingguo Investment”) with independent third parties, Pingguo Asia Aluminum Co., Ltd. (平果亞洲鋁業有限公司) and Guangxi Jinpingguo Aluminum Co., Ltd. (廣西金平果鋁業有限公司). As at June 30, 2013, Chalco International Trading has paid the capital injection of RMB8 million in cash and held 40% equity interest in Jinpingguo Investment.

(c) Transferred as a subsidiary through business combination

As further disclosed in note 22(a), the Company entered into, in December 2012, the Equity Transfer Agreement with Huadian Power International Co., Ltd. (華電國際電力股份有限公司) (“Huadian Power”) to acquire the latter’s 23.66% equity interest in Ningxia Energy at a total cash consideration of RMB1,362 million. By December 31, 2012, the Company has paid RMB545 million to Huadian Power. In early January 2013, the Company paid the remaining cash consideration amounting to RMB817 million to Huadian Power.

Also, as further disclosed in note 22(a), the Company subsequently obtained control over Ningxia Energy on January 23, 2013. Since then, Ningxia Energy was accounted for as a subsidiary of the Group. Prior to obtaining the control over Ningxia Energy, the Group accounted for it as an associate.


2013 INTERIM REPORT




Notes: (Continued)

(d) Disposal of investments in a joint venture and two associates

(i) As disclosed in Note 6, the Company and Chinalco entered into Aluminum Fabrication interests Tranfer Agreement on June 9, 2013, pursuant to which the Company transferred its 50% equity interest in Chalco Sapa Aluminum Products (Chongqing) Co., Ltd. （中鋁薩帕特種鋁材（重慶）有限公司） (“Chalco Sapa”) (the Company’s joint venture) with carrying amount of RMB127.2 million and its 40% equity interest in Guizhou Chalco Aluminum Co., Ltd. （貴州中鋁鋁業有限公司） (“Guizhou Chalco”) (the Company’s associate) with carrying amount of RMB138.75 million, to Chinalco, at consideration of RMB264.5 million in aggregate. Upon completion of these transactions on June 27, 2013, the investments in Chalco Sapa and Guizhou Chalco were derecognised accordingly. The loss on disposal of investments in Chalco Sapa and Guizhou Chalco was RMB1.49 million.

(ii) The Company, through a 90.03% owned subsidiary, Henan Aluminum, held 23.41% equity interest in Henan Zhongfu Special Aluminum Co., Ltd. （河南中孚特種鋁材有限公司） (“Henan Zhongfu”). As disclosed in note 6, the Company transferred its 90.03% equity interest in Henan Aluminum to Chinalco on June 27, 2013, and derecognised the investment with carrying amount of RMB202.2 million in Henan Zhongfu accordingly.

(e) Deemed disposal of Jiaozuo Wanfang

In April 2013, Jiaozuo Wanfang Aluminum Manufactory Co., Ltd. （焦作萬方股份有限公司）(“Jiaozuo Wanfang”), a former subsidiary of the Company, issued an additional 169,266,914 A shares through private offering to independent third parties. Accordingly, the Company’s equity interest in Jiaozuo Wanfang was decreased from 24.002% to 17.750%. The Company lost its control over Jiaozuo Wanfang after its equity interest in Jiaozuo Wanfang was diluted on April 19, 2013 (the “Deemed Disposal”).

The directors of the Company are of the opinion that the Company has significant influence over Jiaozuo Wanfang after the Deemed Disposal considering the Company remains as the largest shareholder and has the rights to nominate five non-independent directors to the board of directors out of eleven directors of Jiaozuo Wanfang. Therefore, the Company has accounted for its equity interest in Jiaozuo Wanfang as an investment in an associate at fair value of RMB1,157 million as at April 19, 2013.

(f) Derecognised investments in a joint venture and two associates of Jiaozuo Wanfang

The investment in the joint venture of Jiaozuo Wanfang, Jiaozuo Wanfang Water Company （焦作萬方水務公司）with carrying value of RMB4.5 million as at April 19, 2013, and the investment in two associates of Jiaozuo Wanfang, Jiaozuo Coal Group Xinxiang (Zhaogu) Energy Corporation Co., Ltd. （焦作煤業集團新鄉（趙固）能源有限責任公司） and Jiaozuo Wanfang Industry Co., Ltd. （焦作市萬方實業有限公司） with carrying value of RMB1,469 million in aggregate as at April 19, 2013, were derecognised by the Company as a result of the Deemed Disposal of Jiaozuo Wanfang.

The English names of joint ventures and associates represent the best effort by the management of the Group in translating their Chinese names as they do not have any official English names.

102



9. TRADE AND NOTES RECEIVABLES

June 30,

2013

December 31,

2012

(Audited)

Trade receivables 4,686,256 1,833,475

Less: provision for impairment of receivables (412,663) (408,256)

4,273,593 1,425,219

Notes receivable 2,633,622 1,190,643

6,907,215 2,615,862


2013 INTERIM REPORT



9. TRADE AND NOTES RECEIVABLES (CONTINUED)

Trade receivables are non-interest-bearing and are generally on terms of 3 to 12 months. Advance

payment is required for sales to certain customers. The sales to certain subsidiaries of Chinalco

are receivable on demand. These terms are extended for qualifying long term customers that have

met specific credit requirements. As at June 30, 2013, the ageing analysis of trade and notes

receivables was as follows:

June 30,

2013

December 31,

2012

(Audited)

Within 1 year 6,103,930 2,209,725

Between 1 and 2 years 317,021 286,111


Over 3 years 576,993 400,211

7,319,878 3,024,118

Less: provision for impairment of receivables (412,663) (408,256)

6,907,215 2,615,862

104



10. ASSETS OF A DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE

Details of assets of a disposal group classified as held for sale are as follows:

June 30,

2013

December 31,

2012

(Audited)

Property, plant and equipment — 621,705

Land use rights — 129,964

— 751,669

In December 2010, the Company, through a 90.03% owned subsidiary, Henan Aluminum, signed

an investment agreement with an independent investor to establish Henan Zhongfu. Henan

Aluminum completed the capital injection in cash amounting to RMB200 million for a 26% equity

interest in Henan Zhongfu in 2010. In addition, the investment agreement stipulated that Henan

Aluminum would transfer certain assets to Henan Zhongfu with a carrying value amounting to

RMB752 million, and Henan Zhongfu would assume an equivalent amount of liabilities from Henan

Aluminum. The transfer of these assets is expected to be completed in 2013. Henan Aluminum

is part of the Aluminum Fabrication Segment. In accordance with the requirements under IFRS 5

Non-current Assets Held for Sale and Discontinued Operations, the above assets were classified as

“assets of a disposal group classified as held for sale” on the statement of financial position as at

December 31, 2012.

As set out in note 6 to the financial statements, the Company disposed of its 90.03% equity

interest in Henan Aluminum to Chinalco on June 27, 2013. Therefore, the investment agreement

with an independent investor to establish Henan Zhongfu was transferred to Chinalco together

with above transaction, and the assets classified as “assets of a disposal group classified as held

for sale” were derecognised accordingly as at June 27, 2013.


2013 INTERIM REPORT



11. INTEREST-BEARING LOANS AND BORROWINGS

June 30,

2013

December 31,

2012

(Audited)

Long-term loans and borrowings

Bank and other loans (Note (a))

— Secured (Note (f)) 12,724,440 —

— Guaranteed (Note (e)) 6,198,152 6,286,261

— Unsecured 16,736,899 19,570,484

35,659,491 25,856,745

Medium-term notes and bonds and long-term

bonds (Note (b))

— Guaranteed (Note (e)) 1,990,363 1,989,245

— Unsecured 22,917,652 19,721,657

24,908,015 21,710,902

Total long-term loans and borrowings 60,567,506 47,567,647

Current portion of medium-term notes (4,994,193) (4,986,037)

Current portion of long-term loans and borrowings (4,635,586) (5,945,958)

Non-current portion of long-term loans and borrowings 50,937,727 36,635,652

106



11. INTEREST-BEARING LOANS AND BORROWINGS (CONTINUED)

June 30,

2013

December 31,

2012

(Audited)

Short-term loans and borrowings

Bank and other loans (Note (c))

— Secured (Note (f)) 1,018,500 900,500

— Guaranteed (Note (e)) 150,000 600,000

— Unsecured 44,815,563 38,812,718

45,984,063 40,313,218

Short-term bonds, unsecured (Note (d)) 15,274,116 16,669,968

Current portion of medium-term notes 4,994,193 4,986,037

Current portion of long-term loans and borrowings 4,635,586 5,945,958

Total short-term loans and borrowings and current

portion of long-term loans and borrowings 70,887,958 67,915,181


2013 INTERIM REPORT




Notes:

(a) Long-term bank and other loans

(i) The maturity of long-term bank and other loans is set out below

Loans from banks and other

financial institutions Other loans

June 30,

2013

December 31,

2012

June 30,

2013

December 31,

2012

(Audited) (Audited)

Within 1 year 4,627,786 5,939,679 7,800 6,279

Between 1 and 2 years 10,028,218 8,037,242 11,799 11,807

Between 2 and 5 years 7,571,998 7,735,704 29,927 35,422

Over 5 years 13,356,846 4,069,980 25,117 20,632

35,584,848 25,782,605 74,643 74,140

Wholly repayable

within 5 years 17,323,706 21,617,626 21,877 24,877

(ii) Other loans were provided by local bureaus of the Ministry of Finance to the Group. The weighted average

annual interest rates of long-term bank and other loans for the six months ended June 30, 2013 was 5.8%.

108




Notes: (Continued)

(b) Medium-term notes and long-term bonds

As at June 30, 2013, outstanding long-term bonds and medium-term notes are summarised as follows:

Face value/maturity

Effective

interest rate

June 30,

2013

December 31,

2012

(Audited)

2007 long-term bonds 2,000,000/2017 4.64% 1,990,363 1,989,245

2008 medium-term notes 5,000,000/2013 4.92% 4,994,193 4,986,037

2010 medium-term notes 1,000,000/2015 4.34% 993,535 992,007

2010 medium-term notes 1,000,000/2015 4.20% 993,345 991,822

2011 medium-term

notes (Note) 5,000,000/2016 6.03% 4,986,345 4,984,110

2011 Jiaozuo Wanfang

medium-term bonds 800,000/2016 6.85% — 797,361

2011 Ningxia Energy

medium-term bonds 600,000/2014 6.65% 600,000 —

2012 Ningxia Energy

medium-term bonds 400,000/2017 6.06% 400,000 —

2011 medium-term bonds 2,000,000/2014 6.36% 1,995,953 1,994,435



2013 medium-term bonds 3,000,000/2018 5.99% 2,975,285 —

24,908,015 21,710,902

Note: The medium-term notes were issued at a fixed annual coupon rate of 5.86% with a five-year term.

Pursuant to the terms of the bonds, the holders of the bonds have an option to negotiate and adjust the

fixed coupon rate according to market conditions or to request repayment of some or all outstanding

balances at the end of the third anniversary.

Long-term bonds and medium-term notes were issued for capital expenditure, operating cash flows and re-

financing of bank loans purpose.


2013 INTERIM REPORT




Notes: (Continued)

(c) Short-term bank and other loans

Other loans were entrusted loans provided by other stated-owned enterprises to the Group.

The weighted average annual interest rates of short-term bank and other loans for the six months ended June 30,

2013 was 5.39%.

(d) Short-term bonds

As at June 30, 2013, outstanding short-term bonds are summarised as follows:

Face value/maturityEffective

interest rateJune 30,

2013December 31,

2012(Audited)

2012 short-term bonds 5,000,000/2013 3.89% 5,171,032 5,074,762 2012 short-term bonds 2,000,000/2013 4.60% 2,058,637 2,013,115 2012 short-term bonds 4,000,000/2013 4.28% — 4,050,486 2012 short-term bonds 2,000,000/2013 4.56% — 2,022,444 2012 short-term bonds 1,500,000/2013 4.60% — 1,507,956 2012 short-term bonds 2,000,000/2013 4.76% — 2,001,205 2013 short-term bonds 3,000,000/2014 4.03% 3,029,792 —2013 short-term bonds 2,000,000/2014 3.80% 2,005,934 —2013 short-term bonds 3,000,000/2013 3.75% 3,008,721 —

15,274,116 16,669,968

All the above short-term bonds were issued for working capital.

110




Notes: (Continued)

(e) Guaranteed interest-bearing loans and borrowings

Details of the interest-bearing loans and borrowings in which the Group received guarantees are set out as follows:

GuarantorsJune 30,

2013December 31,

2012(Audited)

Long-term bondsBank of Communications （交通銀行股份有限公司） 1,990,363 1,989,245

Long-term loansChinalco — 971,988Luoyang Economic Investment Co., Ltd.* （洛陽市經濟投資有限公司） (Note (ii)) — 44,140Lanzhou Aluminum Factory*（蘭州鋁廠） (Note (i)) 20,000 27,000Yichuan Power Industrial Group Company* （伊川電力集團總公司） (Note (ii)) — 24,443China Nonferrous Metals Processing Technology Co., Ltd.* （中色科技股份有限公司） (Note (iii)) — 15,468Jiaozuo Wanfang — 500,000Ning Xia Yin Xing Energy Co., Ltd.* （寧夏銀星能源股份有限公司） 150,000 —Ning Xia Power Development Investment Co., Ltd.* （寧夏電力開發投資有限責任公司） (Note(iv)) 38,704 —Ningxia Energy 756,800 —Ning Xia Tian Jing Electricity Energy Development Group Co., Ltd.* （寧夏天凈電能開發集團有限公司） (Note (iv)) 102,400 —Ning Xia Zhong Ning Power Plant*（寧夏中寧電廠） (Note (iv)) 33,696 —Agricultural Bank of China Limited, Head office Banking Department （中國農業銀行股份有限公司總行營業部） 566,683 —The Company 4,529,869 4,703,222

6,198,152 6,286,261

Short-term loansChinalco — 600,000Ningxia Energy 130,000 —Ning Xia Yin Xing Energy Co., Ltd.* （寧夏銀星能源股份有限公司） 20,000 —

150,000 600,000


2013 INTERIM REPORT




Notes: (Continued)

(e) Guaranteed interest-bearing loans and borrowings (Continued)

* The English names represent the best effort by the management of the Group in translating their Chinese

names as they do not have any official English names.

(i) The guarantor is a subsidiary of Chinalco and a shareholder of the Company.

(ii) The guarantors are non-controlling shareholders of a subsidiary of the Company.

(iii) The guarantor is a subsidiary of Chinalco.

(iv) The guarantors are third parties of Ningxia Energy.

(f) Security for long-term and short-term bank and other loans

The Group has pledged various assets as collateral against certain secured loans. As at June 30, 2013, a summary

of these pledged assets is as follows:

June 30,

2013

December 31,

2012

(Audited)

Property, plant and equipment 8,753,069 2,242,678

Land use rights 63,859 69,496

Intangible assets 332,308 —

Inventories 296,000 50,000

Investment in an associate 472,974 —

9,918,210 2,362,174

Certain secured loans of RMB7,095.7 million were pledged by the receivable rights of future electricity revenue and

its relevant benefit.

112



12. TRADE AND NOTES PAYABLES

June 30,

2013

December 31,

2012

(Audited)

Trade payables 7,741,197 4,883,484

Notes payable 5,894,391 2,175,710

13,635,588 7,059,194

As at June 30, 2013, the ageing analysis of trade and notes payables is as follows:

June 30,

2013

December 31,

2012

(Audited)

Within 1 year 12,749,362 6,644,395



Over 3 years 92,197 137,927

13,635,588 7,059,194

The trade and notes payables are non-interest-bearing and are normally settled within one year.


2013 INTERIM REPORT



13. SELLING AND DISTRIBUTION EXPENSES

An analysis of selling and distribution expenses from continuing operations is as follows:

For the six months

ended June 30

2013 2012

(Restated)

Transportation and loading expenses 548,939 588,270

Packaging expenses 97,443 93,746

Port expenses 27,983 30,421

Employee benefit expenses 29,056 19,117

Sales commissions and other handling fees 10,321 5,928

Warehouse and other storage fees 23,374 27,513

Marketing and advertising expenses 6,869 5,234

Depreciation of non-production property,

plant and equipment 18,123 14,241

Others 85,357 114,612

847,465 899,082

114



14. GENERAL AND ADMINISTRATIVE EXPENSES

An analysis of general and administrative expenses from continuing operations is as follows:

For the six months

ended June 30

2013 2012

(Restated)

Employee benefit expenses 455,366 395,487

Taxes other than income tax expense (Note) 273,200 249,414

Depreciation of non-production property,

plant and equipment 81,463 68,769

Amortisation of land use rights and leasehold land 39,653 36,188

Operating lease rental expenses 62,037 69,568

Traveling and entertainment 61,922 82,803

Utilities and office supplies 24,596 38,110

Pollutants discharge fees 12,420 17,354

Repairs and maintenance expenses 14,658 25,148

Insurance expense 17,828 30,822

Legal and other professional fees 10,941 38,750

Others 203,192 160,688

1,257,276 1,213,101

Note: Taxes other than income tax expense mainly comprise land use tax, property tax and stamp duty.


2013 INTERIM REPORT



15. OTHER INCOME AND OTHER GAINS/(LOSSES), NET

(a) Other income from continuing operations

For the six months ended June 30, 2013, other income from continuing operations

represented government grants amounting to RMB528 million (for the six months ended

June 30, 2012: RMB268 million (restated)), which were recognised as income for the

period necessary to compensate the costs and the Group’s development, etc. There are no

unfulfilled conditions or contingencies attached to the grants.

(b) Other gains/(losses) from continuing operations, net

For the six months ended June 30

2013 2012(Restated)

Gain on acquisition of a subsidiary (Note (i)) 638,907 —Gain on previously held equity interest remeasured at acquisition-date fair value (Note 22(a)) 41,584 —Gain on disposal of Jiaozuo Wanfang (Note 23(a)) 804,766 —Gain on disposal of Alumina Production Line (Note 23(b)) 33,247 —Loss on disposal of investments in a joint venture and an associate (Note 8(d)) (1,491) —Realised gain/(loss) on futures, forward and option contracts, net (Note (ii)) 41,561 (35,774)Unrealised gain/(loss) on futures, forward and option contracts, net (Note (ii)) 10,913 (178,771)Gain on disposal of property, plant and equipment, net 100,628 2,878Others 70,679 33,431

1,740,794 (178,236)

Notes:

(i) The excess of the fair value of identifiable net assets as at the acquisition date of Ningxia Energy over the consideration transferred amounting to RMB639 million (Note 22(a)) was recognised in other gains in the six months ended June 30, 2013.

(ii) None of these futures, forward and option contracts are designated for hedge accounting.

116



16. FINANCE INCOME/FINANCE COSTS

An analysis of (finance income)/finance costs from continuing operations is as follows:

For the six months

ended June 30

2013 2012

(Restated)

Finance income — interest income from banks (160,532) (111,729)

Interest expense 3,131,846 2,442,588

Less: Interest expense capitalised in property,

plant and equipment (309,492) (296,464)

Interest expense, net of capitalised interests 2,822,354 2,146,124

Exchange (gains)/losses, net (56,028) 5,586

Finance costs 2,766,326 2,151,710

Finance costs, net 2,605,794 2,039,981

Capitalisation rate during the period 4.06%-7.05% 5.77%-6.94%


2013 INTERIM REPORT



17. INCOME TAX BENEFIT FROM CONTINUING OPERATIONS

For the six months

ended June 30

2013 2012

(Restated)

Current income tax expense from continuing operations

— PRC enterprise income tax 88,704 87,018

Deferred income tax benefit from continuing operations (122,354) (811,735)

Total tax benefit from continuing operations (33,650) (724,717)

Income tax benefit or expense is recognised based on management’s best estimate of the

weighted average annual income tax rate expected for the full financial year. The estimated

weighted average annual income tax rate from continuing operations used for the six months

ended June 30, 2013 was 3.8% (for the six months ended June 30, 2012: 19.9% (restated)).

118



18. (LOSS)/ EARNING PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY

HOLDERS OF THE PARENT

(a) Basic

Basic (loss)/earning per share is calculated by dividing the (loss)/profit attributable to owners

of the parent by the weighted average number of shares in issue during the period.

For the six months ended June 30

2013 2012(Restated)

(Loss)/profit attributable to owners of the parent (RMB) — From continuing operations (832,358,000) (2,790,005,000) — From discontinued operation 235,913,000 (463,250,000)

Weighted average number of ordinary shares in issue 13,524,487,892 13,524,487,892

Basic (loss)/earning per share (RMB) — From continuing operations (0.06) (0.21)

— From discontinued operation 0.02 (0.03)

(b) Diluted

Diluted (loss)/earning per share from continuing operations and discontinued operations for

the six months ended June 30, 2013 and 2012 were the same as the basic (loss)/earning

per share from continuing operations and discontinued operations as there was no potential

dilutive share.


2013 INTERIM REPORT



19. DIVIDENDS

The board of directors of the Company did not recommend the distribution interim dividend for

the six months ended June 30, 2013 (for the six months ended June 30, 2012: nil).

20. COMMITMENTS

(a) Capital commitments of property, plant and equipment

June 30, 2013

December 31, 2012

(Audited)

Contracted, but not provided for 6,976,144 8,415,513Authorised, but not contracted for 45,882,889 32,560,108

52,859,033 40,975,621

(b) Commitments under operating leases

The future aggregate minimum lease payments as at June 30, 2013 pursuant to non-

cancellable lease agreements entered into by the Group are summarised as follows:

June 30, 2013

December 31, 2012

(Audited)

Within one year 649,861 705,338In the second to fifth years, inclusive 2,568,330 2,784,132After five years 17,335,064 19,120,917

20,553,255 22,610,387

120



20. COMMITMENTS (CONTINUED)

(c) Other capital commitments

As at June 30, 2013, the Group is committed to make capital contributions to its joint

ventures, associates and available-for-sale financial investments are as follows:

June 30,

2013

December 31,

2012

(Audited)

Associates 50,000 3,435,715

Joint ventures 130,800 130,800

Available-for-sale financial investments 29,600 29,600

210,400 3,596,115

21. SIGNIFICANT RELATED PARTY TRANSACTIONS

Other than the related party information and transactions disclosed elsewhere in the interim

condensed consolidated financial statements, the following is a summary of significant related

party transactions entered into, in the ordinary course of business, between the Group and its

related parties during the period.


2013 INTERIM REPORT



21. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTINUED)

(a) Significant related party transactions

For the six months

ended June 30

2013 2012

Sales of goods and services rendered:

Sales of materials and finished goods to:

Chinalco and its subsidiaries 2,356,311 3,367,888

Associates of Chinalco 28,745 —

Joint ventures 19,318 25,885

Associates (note (i)) 344,383 716

2,748,757 3,394,489

Provision of utility services to:

Chinalco and its subsidiaries 141,636 172,015

Associates of Chinalco 8,685 6,593

Joint ventures 8,753 —

Associates 7,672 —

166,746 178,608

122




(a) Significant related party transactions (Continued)

For the six months

ended June 30

2013 2012

Provision of products processing service to:


Purchases of goods and services:

Purchase of engineering, construction and

supervisory services from:

Chinalco and its subsidiaries 864,880 1,200,237

Associates of Chinalco 140 —

865,020 1,200,237

Purchases of key and auxiliary materials,

equipment and finished goods from:

Chinalco and its subsidiaries 2,046,543 2,082,929

Joint ventures 432,938 —

Associates (note (i)) 93,427 712,621

2,572,908 2,795,550


2013 INTERIM REPORT





For the six months

ended June 30

2013 2012

Provision of social services and logistics services by:


Provision of utility services by:


Provision of products processing service by:


Rental expenses for land use rights and

buildings charged by Chinalco and its subsidiaries 334,657 347,131

Other significant related party transaction:

Disposal of the Aluminum Fabrication Segment and

assets of Alumina Production Line and Transferred

Loan to Chinalco (notes 6 and 23) (note (ii)) 10,614,600 —

Disposal of investments in a joint venture

and an associate (note 8(d)) (note (iii)) 264,474 —

124





Notes:

(i) Jiaozuo Wanfang was a subsidiary of the Company prior to April 19, 2013. As disclosed in note 8(e), the

Company lost control of Jiaozuo Wanfang on April 19, 2013 as a result of the Deemed Disposal. Since April

19, 2013, Jiaozuo Wanfang became the associate of the Group. Accordingly, the sales of materials and

finished goods to Jiaozuo Wanfang and the purchase of key and auxiliary materials from Jiaozuo Wanfang

from April 19, 2013 to the end of the reporting period was included in “Sales of materials and finished

goods to Associates” and “Purchase of key and auxiliary materials, equipment and finished goods from

Associates”, respectively. Included in the Group’s trade receivables and trade payables as at June 30, 2013

are amounts due from/to Jiaozuo Wanfang of RMB8.24 million and RMB131.46 million, respectively, which

is on similar credit terms to those offered to the customers and suppliers of the Group.

(ii) As disclosed in notes 6 and 23, during the six months ended June 30, 2013, the Group disposed Aluminum

Fabrication Segment, assets of an alumina production line, and transferred receivables to Chinalco

at consideration of RMB10,614.6 million. The Group’s receivable from Chinalco for the disposal and

transferred loans was due within one year amounting to RMB5,907.9 million and in the second to fourth

year amounting to RMB4,706.7 million, with an annual interest rate of one year benchmark lending rate

issued by the People’s Bank of China.

(iii) As disclosed in note 8(d), during the six months ended June 30, 2013, the Group disposed its 50%

equity interest in Chalco Sapa and its 40% equity interest in Guizhou Chalco to Chinalco at consideration

of RMB264.5 million, which had not been received by the end of the reporting period. The Group’s

receivable from Chinalco for the disposal was due within one year, with an annual interest rate of one year

benchmark lending rate issued by the People’s Bank of China.

During the six months ended June 30, 2013, the Group’s significant transactions with other

state-owned enterprises (excluding Chinalco and its subsidiaries) constitute a large portion

of purchases of raw materials, electricity, property, plant and equipment and services. In

addition, substantially all restricted cash, time deposits, cash and cash equivalents and

borrowings as at June 30, 2013 and the relevant interest earned or paid during the period

are transacted with banks and other financial institutions which are controlled by the PRC

government.


2013 INTERIM REPORT




(b) Key management personnel compensation

For the six months

ended June 30

2013 2012

Fees 384 371

Basic salaries, housing fund, other allowances

and benefits in kind 1,738 1,785

Pension costs — defined contribution schemes (Note) 162 128

2,284 2,284

Note: The Group provided pension to key management personnel in accordance with the regulation of the Beijing

Social Security Bureau.

For the six months ended June 30, 2013, the Group paid remuneration to 14 key

management personnel compared to 14 key management personnel in the corresponding


126



22. BUSINESS COMBINATION

(a) Chalco Ningxia Energy Group Co., Ltd.

In the second half of 2012, the Company signed several purchase agreements with the

equity holders of Ningxia Power Group Co., Ltd. （寧夏發電集團有限公司） (“Ningxia

Power”) to acquire their interests in Ningxia Power through step acquisitions as follows:

• In August 2012, the Company entered into an equity transfer agreement with China

Zhongtou Trust Co., Ltd. （中投信託有限責任公司） (“Zhongtou Trust”) to acquire

11.88% equity interest in Ningxia Power at a total consideration of RMB674.9 million.

• In December 2012, the Company entered into an equity transfer agreement with

Huadian Power International Co., Ltd. （華電國際電力股份有限公司） (“Huadian

Power”) to acquire an additional 23.66% equity interest in Ningxia Power at a total

consideration of RMB1,362 million, of which RMB545 million and RMB817 million

were paid in December 2012 and January 2013, respectively.

As at December 31, 2012, the Company held a total of 35.54% equity interest in Ningxia

Power which was accounted for as an investment in an associate.

• In August 2012, the Company signed an equity transfer agreement with Bank of

China Group Investment Limited （中銀集團投資有限公司） (“CGIL”) to acquire

23.42% equity interest in Ningxia Power at a consideration of RMB1,347.7 million.

• In December 2012, the Company signed an agreement with the other shareholders

of Ningxia Power to increase its equity interest in Ningxia Power up to 70.82% with a

capital injection of RMB2 billion.


2013 INTERIM REPORT



22. BUSINESS COMBINATION (CONTINUED)

(a) Chalco Ningxia Energy Group Co., Ltd. (Continued)

Both of the transactions with CGIL and capital injection of RMB2 billion were completed

in the form of cash payment on January 23, 2013, upon which the Company had 70.82%

equity interest in Ningxia Power and obtained control over Ningxia Power accordingly.

Ningxia Power has been renamed as Chalco Ningxia Energy Group Co., Ltd. (中鋁寧夏能源

集團有限公司) (“Ningxia Energy”) on February 8, 2013.

The acquisition of Ningxia Energy supports the Company’s long-term strategy of integrating

electricity supply with its aluminum business, especially in the primary aluminum segment.

The acquisition has been accounted for using the acquisition method. The interim condensed

consolidated financial statements have included the results of Ningxia Energy since the

acquisition date.

The acquisition date fair value of equity interest in Ningxia Energy held by the Company

immediately before the acquisition is approximately RMB2,589.2 million. The gain recognized

in other gains in the interim condensed consolidated statement of comprehensive income for

the period ended June 30, 2013 as a result of the remeasuring the equity interest in Ningxia

Energy held by the Company before the business combination to fair value is approximately

RMB41.6 million (note 15(b)).

The excess of the fair value of identifiable net assets as at the acquisition date over the

consideration transferred amounting to approximately RMB638.9 million was recognised in

other gains in the interim condensed consolidated statement of comprehensive income for

the period ended June 30, 2013.

128





The fair values of identifiable assets and liabilities of Ningxia Energy as at the acquisition

date were as follows:

Fair value

recognised on

acquisition

Assets

Cash and cash equivalents 3,752,563

Trade and notes receivables 1,261,631

Other current assets 1,685,592

Inventories 850,795

Property, plant and equipment 20,068,122

Intangible assets 6,194,720


Investments in joint ventures 187,172

Investments in associates 993,605


Liabilities

Trade and notes payables (1,627,953)

Other payables and accrued expenses (2,299,453)


Income tax payable (12,683)

Deferred tax liabilities (1,123,188)

Other non-current liabilities (1,803,760)


2013 INTERIM REPORT





Fair value

recognised on

acquisition

Total identifiable net assets at fair value 10,285,227

Non-controlling interests (3,709,442)

Net assets acquired 6,575,785

Gain on bargain purchase recognised in other gains in the

consolidated statement of comprehensive income

(Note 15(b)) (638,907)

5,936,878

Satisfied by cash 3,347,715

Previously held 35.54% equity interest

remeasured at acquisition-date fair value 2,589,163

Total purchase consideration 5,936,878

The Group incurred transaction costs of RMB4.09 million for this acquisition. The transaction

costs have been expensed and are included in general and administrative expenses in the

consolidated statement of comprehensive income.

130





An analysis of the cash flows of cash and cash equivalents in respect of the acquisition of

Ningxia Energy is as follows:

RMB’000

Net cash acquired with Ningxia Energy 3,752,563

Cash consideration paid (3,347,715)

Net inflows of cash and cash equivalents included

in cash flows from investing activities 404,848

Transaction costs of the acquisition included

in the cash flows from operating activities (4,094)

400,754

From the date of acquisition, Ningxia Energy has contributed RMB1,701 million to the

Group’s revenue from the continuing operations and RMB154 million to the Group’s

net profit from the continuing operations for the period ended June 30, 2013. If the

combination had taken place at the beginning of the period, the revenue from continuing

operations would have been RMB71,484 million and the loss from continuing operations for

the period would have been RMB842 million.


2013 INTERIM REPORT




(b) PT. Nusapati Prima (“PTNP”)

On April 26, 2013, the Group acquired 70% equity interest in PTNP, a company

incorporated in Indonesia, which holds several bauxite exploitation and exploration

permits in Indonesia, at a total cash consideration of RMB32.5 million (USD5.25 million).

The provisional fair value of the identifiable assets and liabilities acquired amounted to

RMB3.9 million at the date of acquisition which included property, plant and equipment

of RMB9.8 million. Goodwill arising from this acquisition amounted to RMB29.9 million.

And the amount of the non-controlling interest in PTNP at the date of acquisition was

RMB1.3 million. Net cash outflow on acquisition of PTNP, after deduction of cash and cash

equivalents acquired, was RMB5.2 million.

From the date of acquisition, PTNP has contributed RMB nil to the Group’s revenue from the

continuing operations and RMB0.35 million to the net loss from the continuing operations

for the period ended June 30, 2013. If the combination had taken place at the beginning

of the period, the revenue from continuing operations would have been RMB71,113 million

and the loss from continuing operations for the period would have been RMB855 million.

As at June 30, 2013, the purchase price allocation has not been completed. The fair value

of identifiable assets and liabilities is provisional.

132



23. DISPOSAL OF A SUBSIDIARY AND BUSINESS

All the effects of the disposal of the Aluminum Fabrication Segment were excluded from the

information disclosed in this note below since it was considered as a discontinued operation. For

details of discontinued operation, refer to note 6 for details.

(a) Deemed disposal of Jiaozuo Wanfang

As disclosed in note 8(e), the Company disposed of its equity interest in Jiaozuo Wanfang

on April 19, 2013 through the Deemed Disposal. The details of the net assets disposed of

are as follows:

Note June 30, 2013

Net assets disposed of:

Cash and cash equivalents 190,786

Trade and notes receivables 176,675

Other current assets 235,936

Inventories 507,124

Property, plant and equipment 7 3,711,206

Land use right 48,220

Intangible assets 7 35,174


Investment in a joint venture 4,500

Investment in associates 1,469,145


Trade and notes payables (374,149)

Other payables and accrued expenses (802,635)


Deferred tax liabilities (304)

Other non-current liabilities (12,579)


2013 INTERIM REPORT



23. DISPOSAL OF A SUBSIDIARY AND BUSINESS (CONTINUED)

(a) Deemed disposal of Jiaozuo Wanfang (Continued)

Note June 30, 2013

Net assets 2,541,006Non-controlling interests (1,931,114)

Net assets disposed of 609,892

Gain on deemed disposal of Jiaozuo Wanfang 547,237

1,157,129

Investments in associates 8 1,157,129

Satisfied by: Cash —

The Company recognized a total gain from loss of control of Jiaozuo Wanfang amounting

to RMB804.7 million (note 15(b)), representing the gain of RMB547.2 million from the

above Deemed Disposal and the transfer of a gain of RMB257.5 million from capital reserve

relating to the disposal of 4.998% equity interest in 2010.

An analysis of the cash flows of cash and cash equivalents in respect of the Deemed

Disposal of Jiaozuo Wanfang is as follows:

June 30, 2013

Cash consideration —Less: cash and cash equivalents of Jiaozuo Wanfang disposed of (190,786)

Net outflows of cash and cash equivalents in respect of the Deemed Disposal of Jiaozuo Wanfang (190,786)

134




(b) Disposal of Alumina Production Line of Guizhou Branch of the Company

On June 6, 2013, the Company entered into an Alumina Assets Transfer Agreement with Guizhou

Aluminum Plant (貴州鋁廠), a subsidiary of Chinalco, pursuant to which the Company transferred

the alumina production line of Guizhou Branch of the Company (the “Alumina Production Line”)

to Guizhou Aluminum Plant (貴州鋁廠). Pursuant to the Alumina Assets Transfer Agreement, the

consideration thereof was determined with reference to an independent valuation undertaken by a

professional valuer recognised in the PRC of the net asset of Alumina Production Line as at December

31, 2012, adjusted to give effect to the changes in net assets value from the valuation date (December

31, 2012) to the disposal date. The above transaction was completed on June 27, 2013.

After giving adjustment to the change in the net assets value from the valuation date (December 31,

2012) to the disposal date regarding the Alumina Production Line, the consideration for the disposal

of the Alumina Production Line was finalized at RMB4,300.1 million. The details of the net assets

disposed of are as follows:

Note June 30, 2013

Net assets disposed of:Inventories 560,925Other current assets 11,276Property, plant and equipment 7 3,993,895Deferred tax assets 12,380Trade and notes payables (16,336)Other payables and accrued expenses (1,270)Interest-bearing loans and borrowings (280,000)Other non-current liabilities (14,017)

Net assets disposed of 4,266,853Gain on disposal of the Alumina Production Line 15(b) 33,247

4,300,100

Satisfied by: Cash — Receivable from Chinalco 4,300,100

Total consideration 4,300,100


2013 INTERIM REPORT




(b) Disposal of Alumina Production Line of Guizhou Branch of the Company

(Continued)

An analysis of the cash flows of cash and cash equivalents in respect of the disposal of the

Alumina Production Line is as follows:

June 30, 2013

Cash consideration —

Less: cash and cash equivalents of Alumina Production Line disposed of —

Net inflows of cash and cash equivalents in respect of

the disposal of the Alumina Production Line

—

24. CONTINGENT LIABILITIES

As at June 30, 2013, the Group had no significant contingent liabilities.

136



25. EVENTS AFTER THE REPORTING PERIOD

In addition to the subsequent events disclosed elsewhere in the interim financial statements, the

significant subsequent events are as follows:

On July 11, 2013, the Company issued short-term bonds with a total face value of RMB2 billion at

par value of RMB100.00 per unit with maturing date on January 8, 2014 for working capital and

repayment of bank borrowings. The fixed annual coupon interest rate of these bonds is 4.70%.

26. COMPARATIVE AMOUNTS

As further explained in notes 2(a) and 6, due to the disposal of discontinued operation, the

comparative amounts of the interim condensed consolidated statement of comprehensive income

and related notes have been restated as if the operation discontinued during the current period

had been discontinued at the beginning of the comparative period.

27. APPROVAL OF THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

The interim condensed consolidated financial statements were approved and authorised for issue

by the board of directors on August 30, 2013.

— 137 —

By order of the Board

Aluminum Corporation of China Limited*Xu Bo

Company Secretary

Beijing, the PRC

30 August 2013

As at the date of this announcement, the members of the Board of Directors comprise Mr.

Xiong Weiping, Mr. Luo Jianchuan, Mr. Liu Xiangmin and Mr. Jiang Yinggang (Executive

Directors); Mr. Liu Caiming and Mr. Wang Jun (Non-executive Directors); Mr. Wu

Jianchang, Mr. Ma Si-hang, Frederick and Mr. Wu Zhenfang (Independent Non-executive

Directors).

* For identification purpose only

2013 interim results announcement · 2014-09-01 · market review 6 business review 7 outlook and...

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